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Old 04-02-2008, 04:00 AM   #401
Slasherdude
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Re: Canadian Online Poker Tax Thread

It was suggested that I post this here, so here goes:

I've been living and working in the US for a few years now but lived and grew up in Canada, I do have a greencard (finally) but for the majority of the last few years was here on a working visa. I'm still a Canadian citizen though with a home and bank accounts in Canada, and a home here in the US. Whatever poker winnings I've made while working here, although it hasn't been huge, I've claimed on my US taxes.

I was wondering though, if I did cashout money from Stars or UB and have the money go from my ewallet to my Canadian bank account instead of to my US account, am I performing some sort of Tax Fraud since I'm living here and paying taxes though not a US Citizen?

See, I'm still paying off my still large Canadian student loans and I send money home to my parents to help them out with the house as well and I was wondering whether since I'm Canadian whether all this time I should have been putting that money into my Canadian bank account rather than cashing it to my US account and then sending US cheques to Canada (and paying taxes on all of this).

Thanks!

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Old 04-02-2008, 07:09 AM   #402
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Re: Canadian Online Poker Tax Thread

Citizenship is mostly irrelevant to your situation. What matters is residency. I started off thinking you spend all your time in the US except maybe holidays and family events but then you said you maintain a second home in Canada. How much time do you spend in Canada?

Odds are that you should be paying income tax in the United States. You are a permanent resident and have a substantial presence in the US. Now if you spend a lot of time in Canada then it gets complicated.
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Old 04-02-2008, 02:03 PM   #403
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Re: Canadian Online Poker Tax Thread

You are correct, I'm only back in Canada for family events and holidays, so I'm in Canada for the Christmas holidays and maybe once every other month during the year. So I will continue claiming the poker winnings on my US taxes. Thanks! Its probably smarter if I do transfer my money from my poker accounts to my Canadian account to avoid stupid fees.

This is more of an 'ewallets' question, but from my brief reading of the ewallets thread, Moneybookers seems to be the way to go. Can I give my US address and my Canadian banking info to them without having any problems? Or do I need to give my Canadian address to them use my Canadian bank account with them? Probably a good idea to know this before I sign up.

Come to think of it, the address with my Canadian bank account is my US address. I have to figure out the most economical way of withdrawing about $1000 a month to my Canadian account. I'm looking to rebuild bankroll, and if I'm successful, take larger amounts of money out down the line and finish off those student loans, from what I understand bank transfers might be the way to go later on.

Last edited by Slasherdude; 04-02-2008 at 02:09 PM.
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Old 04-10-2008, 02:23 PM   #404
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Re: Canadian Online Poker Tax Thread

I'm about to file and just thought I would confirm here first that I am supposed to pay taxes on the rakeback I've earned as well as my winnings. Is this correct?
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Old 04-10-2008, 02:33 PM   #405
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Mossberg View Post
I'm about to file and just thought I would confirm here first that I am supposed to pay taxes on the rakeback I've earned as well as my winnings. Is this correct?
I do. It's income, and if you're claiming any gambling income at all, I don't see that RB falls into any special exception that would exempt it from tax.
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Old 04-10-2008, 02:56 PM   #406
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Re: Canadian Online Poker Tax Thread

TCFE or anyone else who has particular experience or understanding:

If in the future a ruling comes down that poker players must declare gambling income and pay tax, and CRA comes after past non-filers, will late filing penalties and interest be applied? Will the fact that the law was not 100% clear until that ruling affect the application of interest?
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Old 04-10-2008, 03:29 PM   #407
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Re: Canadian Online Poker Tax Thread

The ruling is already 100% clear and you should be paying taxes. They will come after you for past tax and interest if they come after you. The incentive not to pay is that it is extremely unlikely that they will come after you.
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Old 04-10-2008, 03:44 PM   #408
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Re: Canadian Online Poker Tax Thread

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If in the future a ruling comes down that poker players must declare gambling income and pay tax, and CRA comes after past non-filers, will late filing penalties and interest be applied? Will the fact that the law was not 100% clear until that ruling affect the application of interest?
That is a good question. For someone who is smart about it though this should never be an issue.
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Old 04-10-2008, 03:51 PM   #409
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Re: Canadian Online Poker Tax Thread

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The ruling is already 100% clear and you should be paying taxes. They will come after you for past tax and interest if they come after you. The incentive not to pay is that it is extremely unlikely that they will come after you.
Please see my post where I asked for someone with "particular expertise or understanding". What I would like to know is whether situations like this, not necessarily related to gambling but in which there was an actual or perceived ambiguity in the law, have occurred in the past and whether that ambiguity has led to a reduction in or forgiveness of the penalties and interest.
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Old 04-10-2008, 04:05 PM   #410
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Re: Canadian Online Poker Tax Thread

It has been too long so I think TorontoCFE would be the best to answer that question.

My view is that if they went after someone that person would be responsible for all the back taxes, interests and fines. There is a 3 year SOL on income tax reassessment but it does not apply to not declaring income.

I think there would be some pragmatic issues that would make it hard to go back too far.
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Old 04-11-2008, 12:48 AM   #411
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Re: Canadian Online Poker Tax Thread

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Originally Posted by cassette View Post
The ruling is already 100% clear and you should be paying taxes.
Where the heck are you getting that from? The CRA guidelines are pretty clear that it is a judgement call based on:

a) amount and frequency of bets
b) intent on playing for profit/livelihood
c) use of special knowledge or inside info
d) amount of organization

They specifically say that no one factor can determine it and that it is all of the facts that must be considered. Since no actual guidelines are out there to determine where the threshold lies, I don't see how it is clear at all. In my mind they purposely made it unclear so there is no way it can possibly be 100% clear.

For example, the "sportsline guys" (LeBlancs? I can't remember) made a ton of bets, intended to play for a living and had an incredible amount of organization. They did not have special knowledge. They strongly fit 3 of the 4 criteria. They did not have to pay tax.

I make a ton of bets on poker, intend to play for a living, have no special knowledge (imo) and little organization. I strongly fit 2 criteria and weakly fit 1. Therefore I fit the criteria to pay even less than the "sportsline guys" do/did. Therefore I will not pay until the law is clarified.
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Old 04-11-2008, 07:19 AM   #412
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Re: Canadian Online Poker Tax Thread

There is 0% doubt to the criteria and 0% doubt that a certain type of player should be paying income tax. Cassette is right in that the law is 100% clear. There is only a small percentage of players who fall into a grey area where it is unclear but for the rest of us trying to argue the ITA is vague will not work.

The Leblanc case was hinged on the fact that it was a sports lottery and that he was betting parlays. Had it been straight wagers on a sportsbook he would have lost.
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Old 04-11-2008, 08:29 AM   #413
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by prayformojo View Post
TCFE or anyone else who has particular experience or understanding:

If in the future a ruling comes down that poker players must declare gambling income and pay tax, and CRA comes after past non-filers, will late filing penalties and interest be applied? Will the fact that the law was not 100% clear until that ruling affect the application of interest?
In practice, they could go after past non-filers (50% chance) but they wouldn't seek penalties, either financial or criminal. It wouldn't be productive and those are usually reserved for those who knew or ought to have known that what they were doing was wrong.
They would likely go after interest though if they did look back.

Probably what you would see would be a court case the CRA wins and then they issue bulletins on the ruling and the way the law is now being intrepreted. They may then offer a period where you can come forward and refile and there would be no interest or penalties but there is also a very good chance it would just be policy from that day forward.

It is hard to tell which way they would go because they have done both and it isn't really a change in law that takes effect on a given day but rather a change/reaffirmation of the way existing laws are intrepreted.
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Old 04-11-2008, 01:33 PM   #414
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Henry17 View Post
There is 0% doubt to the criteria and 0% doubt that a certain type of player should be paying income tax. Cassette is right in that the law is 100% clear. There is only a small percentage of players who fall into a grey area where it is unclear but for the rest of us trying to argue the ITA is vague will not work.

The Leblanc case was hinged on the fact that it was a sports lottery and that he was betting parlays. Had it been straight wagers on a sportsbook he would have lost.
I disagree that there is 0% doubt. How can there be 0% doubt to something that has multiple criteria of varying importance with no stated guidelines to assessing how one would fit the criteria and which criteria is more important than another?

In reading the Leblanc case again, it does seem that the judge was heavily influenced by the fact that they were playing an "unwinnable" game. Essentially the defense proved to the satisfaction of the judge that the Leblancs were just compulsive gamblers. They thought they were +EV (and therefore playing for a livelihood) but there was no way they could have been. Related to this was the "special knowledge or inside info" criteria - they had none, nor could they since they were just making crazy -EV bets and consistently got lucky. Past results were not sufficient to prove they were +EV.

Slightly off topic....

I am considering going into the business of coaching/teaching others to play poker. I would declare all income from this business (obviously). Do we think that this would make me more or less likely to owe tax on my poker winnings?

On one hand I would have a "real job" to support myself and playing poker would be a side income (although >75% of my total income would still be from poker play). On the other hand, I would be putting myself out there as a "poker expert", providing further proof that I have skill at the game.
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Old 04-11-2008, 01:41 PM   #415
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Re: Canadian Online Poker Tax Thread

One other question:

Do we think that being a stay at home parent would be a mitigating factor to paying tax? One could argue that their full-time occupation is as a homemaker/child-care provider and poker would be a hobby pursued in one's spare time.
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Old 04-11-2008, 01:59 PM   #416
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Re: Canadian Online Poker Tax Thread

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I disagree that there is 0% doubt.
I'm sorry but you are just wrong. I know you want it to be otherwise but that doesn't change the reality.

Quote:
In reading the Leblanc case again, it does seem that the judge was heavily influenced by the fact that they were playing an "unwinnable" game.
Right because that nature of the wager is such that it is unwinnable. The sports lottery requires all wagers to be parleys. Anyone who knows basic probability can show that it is so improbable to be successful using parley wagers over the long run and that it is impossible to have a reasonable expectation of profit. That is not true for poker or even for single wager sports betting.


Quote:
Related to this was the "special knowledge or inside info" criteria - they had none, nor could they since they were just making crazy -EV bets and consistently got lucky. Past results were not sufficient to prove they were +EV.
I'm not sure how to explain their success. I know how much Terry was spending on the girls and that implies he was doing fairly well for himself. I also know people who are part of his network and they call confirm the success. I'm not sure if I believe that they actually made $10M but they are up a lot. The incident that caused them to come to CRA's attention after all was when a stripper stole $125k in winning tickets.

The only reason they won vs CRA was because the odds of what they do being successful are so high that a expert witness was able to convince a judge that it was a fluke. If they had been making straight single game wagers they would have lost and CRA would have won.
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Old 04-14-2008, 01:00 AM   #417
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Re: Canadian Online Poker Tax Thread

thanks to henry and toronto for their advice in this thread.

ive been playing poker full-time for 1.5 yrs, and would like to get a mortgage. do i have to
pay my taxes to be eligible? i have decent credit, and have had a lot of money in my bank for about 8 months.

tx
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Old 04-14-2008, 04:26 AM   #418
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Re: Canadian Online Poker Tax Thread

you should be fine but you may have to put down a 35% downpayment. talk to the mortgage person @ your bank.
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Old 04-14-2008, 06:59 AM   #419
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Re: Canadian Online Poker Tax Thread

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thanks to henry and toronto for their advice in this thread.

ive been playing poker full-time for 1.5 yrs, and would like to get a mortgage. do i have to
pay my taxes to be eligible? i have decent credit, and have had a lot of money in my bank for about 8 months.

tx
If you have been claiming it on your taxes then a bank should treat it the same as any other small business individual.They key word is "should". I have a feeling they will still have issues with it. I don't know what the exact criteria is but I vaguely remember that you need to have a minimum of 2 years.

If you have not filed income tax then forget about going to a bank. Your only hope is to borrow from one of Canada's smaller sub-prime lenders. A big sub-lender like Xceed probably won't lend to you but there are a few smaller lenders who will. I was interested in a mortgage a few months ago and they claimed they would be able to do it but in the end I decided to proceed with a mortgage so can't confirm. Expect to pay a higher interest rate than what a bank would offer you. Expect to be required to have a high down-payment.
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Old 04-14-2008, 08:25 PM   #420
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Re: Canadian Online Poker Tax Thread

thanks for the input henry. can you recommend any sub-prime lenders?
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Old 04-14-2008, 10:08 PM   #421
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Re: Canadian Online Poker Tax Thread

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thanks for the input henry. can you recommend any sub-prime lenders?
Not really. I looked into it and then didn't proceed. I started off with Xceed which is a very reputable sub-prime lender. Originally they said they could do it but when it came down to it they backed out.

After that I found two that were willing to give me a mortgage but I found them to be a tad casual and not really the level of professionalism you'd expect for the amount I was going to borrow. They were just too friendly in a way that I felt uneasy and since the purchase wasn't really that good of a deal I just walked away.

I'm pretty sure one of the companies was CanEquity but just google Canadian + mortgage + low-doc and you should get some hits. I think I might still have their cards at home and if I can find them I'll post the info Wednesday. Just as long as it is clear I'm not endorsing them.
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Old 04-14-2008, 11:18 PM   #422
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Re: Canadian Online Poker Tax Thread

Why don't you just pay cash for the house?
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Old 04-14-2008, 11:42 PM   #423
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Henry17 View Post
Right because that nature of the wager is such that it is unwinnable. The sports lottery requires all wagers to be parleys. Anyone who knows basic probability can show that it is so improbable to be successful using parley wagers over the long run and that it is impossible to have a reasonable expectation of profit. That is not true for poker or even for single wager sports betting.
The problem here is that Pro-Line is beatable in the long term despite it being a parlay wager. I have no idea what strategy they were using, but it is entirely possible that they were making +EV wagers. In fact, given that they have won 10M it seems reasonably likely that they were in fact making smart bets. You can't just dismiss the idea of "Reasonable expectation of profit" so easily.

Now, perhaps they pretended to be fish and convinced a judge that their wagers could never be +EV, but why can't a similar analogy be made with poker? Couldn't a poker play bring forth an expert that claimed they were running hot or whatever and receive the same judgement?
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Old 04-15-2008, 02:47 AM   #424
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Re: Canadian Online Poker Tax Thread

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Why don't you just pay cash for the house?

apartments in downtown vancouver are expensive. i dont have 500k lying around.

thanks for the help henry.
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Old 04-15-2008, 08:17 AM   #425
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Re: Canadian Online Poker Tax Thread

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The problem here is that Pro-Line is beatable in the long term despite it being a parlay wager. I have no idea what strategy they were using, but it is entirely possible that they were making +EV wagers. In fact, given that they have won 10M it seems reasonably likely that they were in fact making smart bets. You can't just dismiss the idea of "Reasonable expectation of profit" so easily.

Now, perhaps they pretended to be fish and convinced a judge that their wagers could never be +EV, but why can't a similar analogy be made with poker? Couldn't a poker play bring forth an expert that claimed they were running hot or whatever and receive the same judgement?
The judge looks at Pro-Line, which includes "lottery" in its name and equates it to any other lottery. The determination then is that lotteries, with their high vig, is not beatable. Because the public sees lottery and assumes non-betable then the judge doesn't look any deeper at the +EV angle.

Poker has a different public perception and a judge is far more likely to understand that you can be a +EV poker player and the case is easier to make mathmatically.
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