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Old 12-23-2007, 03:14 AM   #251
flopturnriver01
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Re: Canadian Online Poker Tax Thread

What is the confusion? If you make money you pay taxes on it................

That's cool though keep evading. Maybe it is worth it to you to go to jail and pay thousands in penalties to save a few bucks. Any good poker player would know your risk of ruin in such a venture is very HIGH.
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Old 12-23-2007, 04:13 AM   #252
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Re: Canadian Online Poker Tax Thread

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Originally Posted by BananaBalla View Post
This is what confuses me though... how do you define "winnings"?

If I have a profit of 10k at the end of this year, for example, but left it on say Full Tilt - I'm supposed to be paying taxes on this, even though I have not withdrawn it?

Now let's say, on the first day of the following year, I proceed to lose all 10k. So not only do I lose this 10k, I was supposed to have paid taxes on it?

This doesn't make sense to me...
Yes you pay taxes when you earn the money obviously, not when you cash it out. If it was based on when you cashed it out you could just defer payment indefinately by never taking money offline.

If losing all your money back the next year is a serious concern for you, you probably don't have a reasonable expectation of profit and therefore aren't eligible to be taxed.
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Old 12-23-2007, 04:45 AM   #253
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Re: Canadian Online Poker Tax Thread

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Originally Posted by flopturnriver01 View Post
Any good poker player would know your risk of ruin in such a venture is very HIGH.
lol how are good poker players now experts in gambling tax? Are you the tax expert now?

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Originally Posted by KingGordy View Post
Yes you pay taxes when you earn the money obviously, not when you cash it out. If it was based on when you cashed it out you could just defer payment indefinately by never taking money offline.

If losing all your money back the next year is a serious concern for you, you probably don't have a reasonable expectation of profit and therefore aren't eligible to be taxed.
Do poker sites even keep a record of your daily balances? If not, what's to keep players from chip-dumping their bankrolls into a buddy's account before the auditors come knocking?
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Old 12-23-2007, 04:47 AM   #254
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Re: Canadian Online Poker Tax Thread

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lol how are good poker players now experts in gambling tax? Are you the tax expert now?



Do poker sites even keep a record of your daily balances? If not, what's to keep players from chip-dumping their bankrolls into a buddy's account before the auditors come knocking?
It's common sense.. But I guess maybe I was giving you Canadians too much credit.

This reminds me of the Canadians who drive to the US to shop and fill up their cars. They save maybe 100 bucks total and drive 3 hours from toronto to get here.. Ya that makes a whole lot of sense. Spend 1 hour waiting through customs both sides. Spend 30.00 in gas... All to save 100.00

That's ok evade your taxes. GL with that
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Old 12-23-2007, 05:28 AM   #255
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Re: Canadian Online Poker Tax Thread

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Originally Posted by flopturnriver01 View Post
It's common sense.. But I guess maybe I was giving you Canadians too much credit.

This reminds me of the Canadians who drive to the US to shop and fill up their cars. They save maybe 100 bucks total and drive 3 hours from toronto to get here.. Ya that makes a whole lot of sense. Spend 1 hour waiting through customs both sides. Spend 30.00 in gas... All to save 100.00

That's ok evade your taxes. GL with that
so much anger... chill out
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Old 12-23-2007, 07:52 AM   #256
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Re: Canadian Online Poker Tax Thread

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Originally Posted by BananaBalla View Post
This is what confuses me though... how do you define "winnings"?

If I have a profit of 10k at the end of this year, for example, but left it on say Full Tilt - I'm supposed to be paying taxes on this, even though I have not withdrawn it?

Now let's say, on the first day of the following year, I proceed to lose all 10k. So not only do I lose this 10k, I was supposed to have paid taxes on it?

This doesn't make sense to me...
If you turn around and lose the money the following year then it counts as a loss for next year. This shouldn't be a concern though since if you have a reasonable expectation of profit then this should only happen rarely.
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Old 12-23-2007, 08:03 AM   #257
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Re: Canadian Online Poker Tax Thread

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Originally Posted by flopturnriver01 View Post
What is the confusion? If you make money you pay taxes on it................

That's cool though keep evading. Maybe it is worth it to you to go to jail and pay thousands in penalties to save a few bucks. Any good poker player would know your risk of ruin in such a venture is very HIGH.
The CRA is not the IRS. The public service in Canada is mostly staffed by lazy incompetent individuals who could never get equivalent employment in the private sector. The risk of ruin is pretty much nil.
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Old 12-23-2007, 09:18 AM   #258
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Re: Canadian Online Poker Tax Thread

I am just finishing up my 1st year as playing Poker as my sole source Income and I was wondering if anyone knew the answer to this.

Do I have to pay CPP and EI on Top of income tax? I was trying to calculate how much I am going to owe next year and It kinda makes a difference in how big the check is going to be.
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Old 12-23-2007, 10:31 AM   #259
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Re: Canadian Online Poker Tax Thread

No to EI. 100% certainty.

With CPP I think you do have to pay it but I'm not sure.
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Old 12-23-2007, 12:42 PM   #260
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by flopturnriver01 View Post
Maybe it is worth it to you to go to jail and pay thousands in penalties to save a few bucks. Any good poker player would know your risk of ruin in such a venture is very HIGH.
This could be the most ridiculous thing I've ever read. Nobody in Canada is going to jail for not paying taxes on poker winnings, period.
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Old 12-23-2007, 01:02 PM   #261
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Re: Canadian Online Poker Tax Thread

I still don't understand how the CRA (or IRS for that matter) can tax a professional gambler. Yeah sure I won 200K online but lost 250K in the casino. Keep a journal of your weekly trips to the casino and case closed, no?
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Old 12-23-2007, 01:30 PM   #262
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Re: Canadian Online Poker Tax Thread

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I still don't understand how the CRA (or IRS for that matter) can tax a professional gambler. Yeah sure I won 200K online but lost 250K in the casino. Keep a journal of your weekly trips to the casino and case closed, no?
Sure. Now explain to them how you afford to live.

The CRA can do a quality of life assessment. They estimate your income based on your lifestyle. This goes beyond just poker. An acquaintance of mine who runs a landscaping company was audited. CRA determined that based on his spending he must have X in unreported income. While he was doing a lot of cash jobs off the books the amount CRA estimated was considerably greater than what he actually had not reported.
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Old 12-23-2007, 03:46 PM   #263
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Re: Canadian Online Poker Tax Thread

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This could be the most ridiculous thing I've ever read. Nobody in Canada is going to jail for not paying taxes on poker winnings, period.
Um, what? Do you know what tax evasion is (serious question)?
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Old 12-23-2007, 04:16 PM   #264
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Re: Canadian Online Poker Tax Thread

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If you turn around and lose the money the following year then it counts as a loss for next year. This shouldn't be a concern though since if you have a reasonable expectation of profit then this should only happen rarely.
I disagree because poker players often move up in stakes to a level they can't beat and then lose it all back by falling victim to the Peter Principle. So you could have a reasonable expectation of profit in 2007 and win $10K playing 100NL. Then in 2008 you move up to 400NL, and maybe no longer have an expectation of profit, refuse to move down then lose all the money back.

In that case the CRA would theoretically expect you to pay them about $5K in taxes even though you lost back all your winnings from the previous year. I don't think that's particularly fair. But the tax laws were not written by anyone with any understanding of poker. So we're supposed to try to figure out how to apply their vague rules.
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Old 12-23-2007, 05:17 PM   #265
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Re: Canadian Online Poker Tax Thread

The thing with the whole "expectation of profit" term is that almost anytime I have told somebody smart and educated that I can make money playing poker online they look at me like I'm insane. My former boss was a really smart guy, and he had also played some poker home games before. But when I mentioned being able to win at online poker he said "What? How can you get tells from people when you can't see them?" And he had a ridiculous smirk on his face as if to imply 'wow, I'm talking to a helpless addicted problem gambler right now.'

And I have had similar experiences when mentioning it to other smart educated people. The people who seem to believe that you can make money playing poker online tend to be the less educated sort, at least in my experience. Anyways, I'm rambling, but I think a lot of judges would be hard pressed to find that an online poker player can have a reasonable expectation of profit. Maybe if there were some gambling experts who explained it to them then they would believe it.

Is one year of profitable gambling sufficient to prove that there is a reasonable expectation of profit to a judge? We know that if 500K hands are played in that year then it's sufficient. But will a court find the same thing? It's interesting when you look at that ruling about the 2 proline bettors who made at least $400K in 4 straight years making many millions of dollars of bets. The judge determined that that was not a reasonable expectation of profit so they didn't have to pay taxes. I would think over that kind of sample size it would be impossible to win 4 straight years as a fluke. I think the case against them is stronger than the case against an online poker pro who has won big over a single year. Do any of you guys have an opinion on that case as experienced gamblers? Was anyone else surprised that it was ruled that they shouldn't have to pay.

Also the other thing that bothers me is that I don't have a reasonable expectation of profit every time that I play. If I'm at a bad table with players who play very similarly to me, or even better, then I will be expected to lose to rake in the long run. Some days when I log in all the games are like that. So I don't have an expectation of profit on those days. Who is to say that the games won't get tougher next year due to regulations or waning popularity and then my edge will disappear? It is troubling to me that you can only analyze an expectation of profit when you look in hindsight over a large sample size. I don't think anyone can look at a given table today and know for certain that they have an expectation of profit in the future. All I am saying is that I don't think a court case against an online poker pro who has been playing for a relatively short time period would be clear cut.
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Old 12-23-2007, 06:39 PM   #266
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Re: Canadian Online Poker Tax Thread

Pyedog your posts are way way off in this thread. Please don't clutter this important thread with really inaccurate speculations.
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Old 12-23-2007, 06:41 PM   #267
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Re: Canadian Online Poker Tax Thread

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Sure. Now explain to them how you afford to live.

The CRA can do a quality of life assessment. They estimate your income based on your lifestyle. This goes beyond just poker. An acquaintance of mine who runs a landscaping company was audited. CRA determined that based on his spending he must have X in unreported income. While he was doing a lot of cash jobs off the books the amount CRA estimated was considerably greater than what he actually had not reported.
You're right. My example wouldn't work for someone with no other source of income but it should drastically reduce taxable income for someone with a modest lifestyle.
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Old 12-23-2007, 08:07 PM   #268
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Re: Canadian Online Poker Tax Thread

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Um, what? Do you know what tax evasion is (serious question)?
Yes, do you know what tax avoidance is? (serious question).
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Old 12-23-2007, 08:46 PM   #269
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Re: Canadian Online Poker Tax Thread

Does anyone here play online poker full time and has payed taxes? Or know somebody who has?
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Old 12-24-2007, 03:00 AM   #270
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Re: Canadian Online Poker Tax Thread

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Pyedog your posts are way way off in this thread. Please don't clutter this important thread with really inaccurate speculations.
Ouch. Understood, I'll go back to lurking. You guys please keep up a good discussion though because it's like the only information on this subject anywhere.
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Old 12-24-2007, 06:03 AM   #271
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Re: Canadian Online Poker Tax Thread

Anyone have a link to the Pro Line case? I'm intrigued by the gov'ts inability to win the case.

It's odd b/c the "vig" for most Pro Line events is ~ 30%. There are stale lines and exploitable +EV wagers you can make (no need to divulge in this thread), but I think it'd be very easy to show statistically and through betting frequency/history that anybody who had a +ve ROI 4 years in a row for 100k+ could only do so by passing all 4 necessary criteria.
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Old 12-24-2007, 06:16 AM   #272
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Henry17 View Post
Sure. Now explain to them how you afford to live.

The CRA can do a quality of life assessment. They estimate your income based on your lifestyle. This goes beyond just poker. An acquaintance of mine who runs a landscaping company was audited. CRA determined that based on his spending he must have X in unreported income. While he was doing a lot of cash jobs off the books the amount CRA estimated was considerably greater than what he actually had not reported.
What kind of records do they use to esimate your lifestyle? How they prove that you make more than what your financial records show?
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Old 12-26-2007, 11:43 PM   #273
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Re: Canadian Online Poker Tax Thread

Here is the Pro Line case: http://decision.tcc-cci.gc.ca/en/200...006tcc680.html
The CRA lost the case because they could not prove that the defendants did anything to minimize risk and the defendents emphasized that Pro line is a lottery and not sports betting and thus there could never be a reasonable expectation of profit and there is a public perception that lotteries are tax free that the courts did not want to counter.

The CRA uses the Net Worth Analysis.
It means they take your net worth as available from records, add estimated living expenses and deduct out your known (declared) income. If there is any difference, then they can prove you have undeclared income.

Public records tell them if you have homes, vehicles or real property. You would have to turn over bank statements. They can also interview neighbours, look at your credit card statements, border crossing records, etc.

Since there are something like 60 people in Canada available to do this, it has to be big bucks evaded before they bother.
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Old 12-27-2007, 12:39 AM   #274
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Re: Canadian Online Poker Tax Thread

^^^
TorontoCFE: Do you have any opinion on what, if anything, the ProLine case means for online poker players?

Obviously it's not perfectly on point, but are there any worthwhile things that we might extrapolate from it for our cause? (either for or against, i guess)
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Old 12-27-2007, 11:42 AM   #275
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Re: Canadian Online Poker Tax Thread

A side note to the pro-line case. The reason it came to be was because Terry was an idiot and got screwed over by a stripper he met at Pigale. She was playing him but when she stole $60k in winning tickets Brian helped his brother come to his senses and they went after the stripper. This got a lot of news coverage. CRA had no choice but to act. Had they just kept a low profile they never would have had any issues.

The way they run their betting is very well organized. They have a deal with lottery vendors who they call their bets into. The lottery vendors charge them a small commission for filling out and managing the wagers. They have a few dozen lottery vendors working for them.

The case really doesn't matter much for poker. The parley nature of Pro-Line was a major factor in why CRA lost.
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