What I would do is not really relevant. What someone who doesn't know much about investments would do is index. As long as the after tax return from indexing is greater than the debt servicing costs it makes no sense to ever pay off a mortgage unless you're doing it for irrational psychological reasons.

Not something I have ever given much thought -- I have been in a situation where renting is the better financial decision for 15 years so I have only given the consequences of buying a little consideration.

The first thing is that as a poker player you can't get a mortgage from a bank. The only bank that will even consider it is Desjardins and their requirements are higher than other NIV options. CIBC used to offer NIV mortgages though a division called FirstLine but they stopped issuing new mortgages around the time of the US housing collapse and I don't believe they ever started up again. I would be concerned about the process in getting a NIV mortgage -- the process varies between lender but often they ask you to document the sources of funds. It seems to me like applying for one of these mortgages would be doing a lot of the work for CRA. If I was to buy a place I'd probably want to go full no-doc / equity lend over NIV but then you'd be looking at 30%-40% down and limited in type and location of property not to mention points upfront and higher interest rates. This would be true of NIV as well in case you didn't know although some NIV lenders will not have points.

The second issue is that a house is pretty fixed and not very liquid. A lot of this comes down to how much money we are talking about but if I was making good money for years and the tax liability was sufficiently large I'd like to go into a conflict with the government having the ability to even if I lose to say **** you I'm not paying. That is a lot easier to accomplish if you have assets that can be hidden -- houses are pretty hard to hide. The next option would be to have someone close own it but that gets messy when you have mortgages.

The last thing is what gets reported about the transaction that might be an issue. Real estate transactions are a very good way to launder money so there is some reporting going on. Most of it can be avoided by having the funds used for the downpayment in a Canadian financial institution for at least 3 months (or maybe 6 I don't remember exactly) but there could still be other stuff I don't know about. We tried to discuss this years back in this topic but never really got into what gets reported to who when a real estate transaction is completed. It might be the kind of thing that triggers a quality of life assessment -- I have no idea but over a very tiny sample size I do think it increases your odds of getting on CRA's radar.

Hello,
Thanks for your help in advance, i have been wondering about taxes.
-I quit my job in April 2013 and have been living of savings and poker since.
-I didn't work in 2014 so i'm not going to have a T4slip or anything.
-I made 3 cheque withdrawals of 2000USD (2xxx.xx CAD depending on the exchange rate at the time), and deposited it to my bank account. Once in Aug, Oct, and December of 2014, which is the only "paper trail"

So when i file, should i just say i was unemployed and file an income of zero?

Appreciate the help guys!

Yeah, you are not taxable.

Just so you guys know, Henry in particular, CRA have been on several (easily 10-20+) Quebec's player cases the past 2 years. They are hungry, got my tax reassessment from them and they literally exaggerated my income by 2x counting stuff twice and what not.

The 2x assessment is normal and has nothing to do with poker. When I've seen these things for other business income they have always gone way over 2-3x what the person actually didn't report. I suspect it is part of a scare strategy to motivate people to come to the table much more anxious.

It still seems so strange to me that they are being so aggressive in Quebec and handing out refunds in other parts of the country.

The taxpayer initiated adjustments are a completely different issue. CRA is required to process the adjustment and return the tax money paid but that does nothing to prevent them from turning around and going after the person who they just returned the money to.

The adjustments are just a procedural question and it has nothing to do with the taxability of poker winnings or even the taxability of the individual who received the adjustment.

My case has gone through 6 months of auditing. They went through not only the financials, but also the legal aspects of my case.

Though at first I thought this sucked, I can see how having gone through this can actually be a good point. I now have it in writing that they've determined my poker playing is not of a business and that they've determined the money I paid taxes on in the past was non-taxable.

I assume that since this wasn't a simple "write the guy a check" case that I'm in better shape now than I would've been without the audit. I assume this means I have pretty much nothing to worry about, but if I'm missing something I'd like to know.

If you have an advanced ruling that should be binding on CRA but only for the years they looked at. It would not necessarily cover future years. If you have something other than an advanced ruling then it depends. I've called to get guidance on issues and none of those were binding. I did it just to have someone to blame if I happened to be wrong on my interpretation. My guess is that what you have is binding but whoever was handling it for you should have told you.

Thanks Henry.

Article on the legalities of online poker in Canada
http://www.cbc.ca/news/business/onli...egal-1.3006380

Quick update:

I initially requested my taxes for 2010 and 2011 to be adjusted back in March of 2014.

I've recently received a full refund + interest for taxes paid in 2010.

I've been rejected in my claim to receive a refund for 2011 taxes, and have filed a notice of objection.

2010 made up about 85% of the total taxes paid between those years.

The sticking point is that my auditor has been repeatedly interpreting the facts of my case in ways that don't make sense. I'd give them proof of my poker playing, and if one detail didn't make sense to them they'd make something up and say "no, we think it's more likely this money came from something taxable".

They also repeatedly ignored facts of the case that I presented to them.

I thought that it would be "easy" once I got to the point where they agreed my poker playing wasn't taxable. The problem was that they seemed to have incentive to interpret everything they could in their favour rather than on the side of what the truth is.

That seems very strange. What does the CRA see as the difference between your activities in 2010 and 2011?

In 2010, they matched (almost) all of my PokerStars withdrawals to deposits in my bank account.

In 2011, I made a lot of withdrawals to Moneybookers. Things weren't as straightforward to match up. They liked to say "look at how much money you deposited into your bank, and how much you won at poker".

Yes, I deposited much more into my bank than I won. I also started with a much larger PokerStars balance in 2011 than I ended with. Regardless of how much proof I showed them indicating that much of the money I deposited was considered for taxation in a previous year, they just said no anyways. They didn't even show anything about why my claim was wrong, they just made up their own story which required some major changes in the facts.

Their logic for rejecting my claim for 2011 is ridiculous, but that doesn't seem to matter.

That's discouraging. I know that many poker players (myself included) have very complicated transaction histories (to/from various poker sites, skrill, neteller, etc). I would find it very challenging to provide all of those records going back several years. Were you not able to use Pokertracker/HEM records to support your claims?

On the bright side, it seems positive that they are only disputing the amount in question rather than trying to argue that your winnings are taxable.

Have a question for someone with more knowledge about the CRA then me. Is this common for them to save some of their losses by finding some small loop holes on small amounts of the money to be returned (15% in brights case) on hopes you'll be happy with the 85% and just ignore the rest of it?

In my case they seemed to put the burden of proof completely on me. As in, they were coming from the position that I needed to prove beyond any doubt that the money I claimed to have come from poker did indeed come from poker.

I think this is silly. I'm not sure what it will be like on appeal or if/when it goes to court. I would think/hope that this is the mentality of those on the front line of auditing rather than something I'll have to fight my whole way through.

At one point I provided them a complete transaction audit from PokerStars which for their purposes would be much better than HEM data. I also summarized it to show down to the cent exactly where all of my money came from in 2010 and 2011. They rejected it with something like "we didn't understand this", and just used their logic of "well, he hasn't proved his case, so we say no".

It's like they don't need to actually make a logical argument, they just do whatever they want. I'm still a bit bitter about how this has all gone down.

I feel fortunate that my 2010 was a bit simpler than my 2011 leading to a "fast" payout (14 months). Maybe some auditors won't be as ridiculous as mine was.

And yes, I also agree that it's a positive sign that they agree that my poker playing wasn't taxable.

My Stars name in 2010/2011 is/was Klairic.

I spoke to a law firm about the legality of online poker. They basically said that there were a few cases in which losing players argued that they were professionals and attempted to write off their losses as a business expense. Each time the CRA won the case and the losing professionals were unable to write off their losses (which is obv good for us as the CRA cant have it both ways, in the sense that they cant make losing professionals unable to write off losses but make winning professionals pay tax). Conversely each time a winning professional fought their tax bill they won. The law firm didnt give me their opinion on whether or not i should risk not paying tax ( as down the road i may have to pay interest etc on the amount) but their introductory phone call was interesting. They said a detailed analysis would cost around 5k, so i will likely do that and report back itt.

Appreciate the updates guys

Just had a really large score in scoop main event. Have been making periodic wire trasnfers from stars to BMO for a couple years now. I want to withdraw high 6 figs now. Anyone have any insight on what to do?

You should get a legal opinion as to whether or not you need to disclose your Stars account to the CRA, since it is over $100k.

I have a question after browsing through some of the thread. I am Canadian and have been living off poker for 7ish years. In the past 2-3 years I've been pulling in 80K plus per year online to my bank account. Should I be worried about the CRA since I've been declaring myself unemployed and only declaring my interest income?

If I'm planning to live in Canada late 2015 and all of 2016 from anther country, am I exempt from the tax laws of Canada? I'm an Australin citizen getting a working permit and working visa for 12 months. The amounts I withdraw won't be huge, but they'll be to my Aus bank accounts most likely. Sorry if this seems like an ignorant question.

I think you would more likely have to deal with your australian tax laws.

Ah cool. There's no tax in Aus for online poker.