Agin please tell me how Mr. Perlowski's answer is inconsistent with my statement that "most people simply say that if it does not generate a 1099 or W2G its not taxable."

Do you suppose Mr. Perlowki will disagree with my claim that most people don't claim their gambling winnings unless they generate a 1099 or W2G.

I don't know why you want to keep painting me as claiming that the winning isn't taxable.

I do believe there is a reasonable argument to be made that it isn't taxbale seperate and apart from the Main Event winnings -- but I also know that not all reasonable arguments will win in tax court.

The argument is that the Main event is simply a continuation of the original wager. Let me pose several hypothetical situations to you.

Situation 1

A casino has a 2 day long tournament in which the buy in is 100. 100 people enter and the prize pool is $10,000 (I am ignoring the juice for simplicity). The structure of the tournament is a shootout meaning that there will be 10 tables of ten players. Each table plays down to one player. the winner of each table will play at the final table on day 2 and each will start with the same number of chips.

Question: at the end of day one has what are the tax consequences to a player who has won his first table and advanced?

Situation 2

A casino has a tournament with the same structure as situation 1 except that on day 2 additional players are permitted to enter the tournament for the some of $1,000. The second day is a standard Multiple Table Tournament with each player starting with the same number of chips.

Question: at the end of day one has what are the tax consequences to a player who has won his first table and advanced?

Situation 3

A Casino announces a $1,000 buyin tournament. The day before the tournament they run single table satellites which cost $100 to enter. Each table goes off 10 handed and the winner of each table receives a nontransferable/nonrefundable entry to the main tournament the next day.

This is the sceanrio which we have been addressing and your answer to the question of the tax consequences appears to be consistent with Mr. Perlowski that this in fact is a taxable winning of $1,000.

Now if your answer to the question of the tax consequences in scenario 2 is different from the answer to the question of the tax consequences of the scenario 3 then I pose the question to you what in fact is the difference between those two scenarios that would generate disparate tax treatment.

Now if your answer to the Question of the tax consequences of sceanrio 2 is different from the answer to your answer to the question of the tax consequences of sceanrio 1 I ask what is the difference between those two scenarios that warrants disparate tax treatment and why do you believe that the difference warrants different tax treatment.