2006-03-18
Let's say you enter a satellite tournament for the World Series of Poker and manage to win one of the $10,000 entries. You then, of course, get knocked out in the main tournament, long before you reach the money. What are the tax implications of winning your entry fee? On the one hand, you didn't win any actual cash. On the other, the seat has a definite $10K value. I'd hate to be on the hook for $10K worth of ordinary income that I never actually saw. That would make playing in the WSOP a very expensive lark, even via satellite entry.