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Old 10-09-2008, 05:07 PM   #526
Henry17
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Re: Canadian Online Poker Tax Thread

I believe I have come up with a way to set it up so that the income wouldn't be taxable but it would require two at arms-length players to work together. I have to do more research on it as it involves some fairly new legislation and I'm not going to get into details only to realize I stupidly overlook something obvious but I'm quite excited.
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Old 10-09-2008, 05:49 PM   #527
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Re: Canadian Online Poker Tax Thread

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He is wrong. It isn't even a question. There is so much case law on this that any lawyer who would claim professional gambling is not taxable would be disbarred for incompetence.
I think that you're wording this too strongly. Based on the legal document that I received there haven't been any successful tax cases against professional gamblers since the 1950s, and even those had extenuating circumstances (inside info or on games with a higher skill to luck ratio than poker). In the meantime the CRA has lost a bunch of seemingly very winnable cases against pro gamblers. Granted, apparently there have been cases settled out of court against gamblers which (I'm guessing) aren't on public record. Eventually they will probably win an open and shut case against a poker player and then set a clearer precedent. But there still seems to be a possibility that the judge will disagree and set the opposite precedent.

I mean, you're the lawyer, so your opinion means more than mine. I'm just saying it doesn't appear to be as open as shut as you claim. That said, every accountant or tax lawyer I've talked to has concluded that full time pro gamblers are taxable. So I'm moving out of this country to somewhere with clear and favourable laws on this subject.
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Old 10-09-2008, 06:03 PM   #528
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Re: Canadian Online Poker Tax Thread

There has been no successful cases against gamblers recently but in several cases the topic is addressed.

In Lupton (2005) the topic of poker was addressed.

"He has been less successful in making a living at the gambling table. While correct in his belief that "gambling winnings" are non-taxable, if he ever does realize his goal of earning income from gambling to the extent that he is in the "business of gambling", his winnings will be taxable. In such circumstances, he will not only need to report his income, but will also be required by the Act to keep books and records to support the claims made in his returns. In the years 1998-2001 however, he was not in the gambling (or any other) business."
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Old 10-17-2008, 03:22 PM   #529
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Re: Canadian Online Poker Tax Thread

Trying to find a post either in this thread or another one and I just can't pull it up. It was a poker pro who was investing his money in a certain way to minimize taxes. There was a link to his blog where he outlined his plan. Can anyone pull this up for me?
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Old 10-17-2008, 03:27 PM   #530
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Re: Canadian Online Poker Tax Thread

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Trying to find a post either in this thread or another one and I just can't pull it up. It was a poker pro who was investing his money in a certain way to minimize taxes. There was a link to his blog where he outlined his plan. Can anyone pull this up for me?
It was in the other thread. The investments he was using are called flowthroughs. That might help you search.

Edit : Sorry this is the other

Post 474

Last edited by Henry17; 10-17-2008 at 03:48 PM.
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Old 10-17-2008, 04:12 PM   #531
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Re: Canadian Online Poker Tax Thread

Henry: That's the one. Damn your fast
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Old 10-27-2008, 01:54 AM   #532
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Re: Canadian Online Poker Tax Thread

Great post, all.

New area/hypothetical to discuss.

Imagine I am an uber-winning poker player, who is a Canadian resident and citizen, but is currently not playing cards.

Can I move abroad, cut all ties with Canada to declare myself a non-resident, and live in a jurisdiction where online gaming winnings are taxfree?

Then, if I made, say, ~$1mm over a few years, I could repatriate that money when I move back to Canada?

Finally, if so, do you know which jurisdictions abroad do not tax poker winnings? Preferably some nice banana republic with awesome beaches?

Thank you
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Old 10-27-2008, 08:52 AM   #533
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Re: Canadian Online Poker Tax Thread

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Great post, all.
Can I move abroad, cut all ties with Canada to declare myself a non-resident, and live in a jurisdiction where online gaming winnings are taxfree?
Yes. Canadian tax is based on residency not citizenship. There is an interpretative bulletin on what it required that I posted the link to earlier. It is actually pretty easy to do and you can still spend quite a bit of time in Canada (up to 180 days) while not being a resident.

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Then, if I made, say, ~$1mm over a few years, I could repatriate that money when I move back to Canada?
Of course.

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Finally, if so, do you know which jurisdictions abroad do not tax poker winnings? Preferably some nice banana republic with awesome beaches?
I'm fairly sure the UK is tax free but the cost of living in London would make it -EV.
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Old 10-27-2008, 09:27 AM   #534
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Re: Canadian Online Poker Tax Thread

Australia ftw.
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Old 10-27-2008, 11:45 AM   #535
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Re: Canadian Online Poker Tax Thread

If audited ,does the CRA have the authority to look in our stars/ft accounts?
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Old 10-27-2008, 11:50 AM   #536
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Re: Canadian Online Poker Tax Thread

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If audited ,does the CRA have the authority to look in our stars/ft accounts?
They don't need to. When doing a net worth assessment CRA doesn't have to establish the source of the income. They just need to establish that you have more stuff than you should based on your reported income and then they assign you a new income and the onus is on your to refute it.
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Old 10-27-2008, 01:41 PM   #537
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Re: Canadian Online Poker Tax Thread

right, but I think the question is whether they can look at our poker account and tax us on that money, which would be no.
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Old 10-27-2008, 01:50 PM   #538
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Re: Canadian Online Poker Tax Thread

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right, but I think the question is whether they can look at our poker account and tax us on that money, which would be no.
Then the answer becomes - never cash out of a poker account unless its swapping cash and paying a guy vig for it
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Old 10-27-2008, 01:56 PM   #539
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Re: Canadian Online Poker Tax Thread

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right, but I think the question is whether they can look at our poker account and tax us on that money, which would be no.
Not necessarily. I think cost and effort would be too great but just because a corporation is outside of Canada doesn't mean that CRA can't get the records. Realistically it is not going to happen as even the best poker players don't make enough to justify it.

I don't understand what the advantage of this is. Is the plan to never cash out?
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Old 10-27-2008, 04:43 PM   #540
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Re: Canadian Online Poker Tax Thread

It is useful in the hypothetical of being audited. Say we have a 100K roll on line that will be about 40K less back tax we owe.
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Old 10-27-2008, 05:22 PM   #541
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Re: Canadian Online Poker Tax Thread

Ok I see. You are right that would be a factor at first because the amount you won that was devoted to bankroll building wouldn't be known. Once you hit your ideal bankroll though it would cease to be a factor in future years.

Thing is when they do a net worth assessment they tend to over estimate your income so in some cases it might be in your best interest to provide the records.
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Old 10-28-2008, 12:19 PM   #542
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Re: Canadian Online Poker Tax Thread

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Originally Posted by futurama View Post
Great post, all.

New area/hypothetical to discuss.

Imagine I am an uber-winning poker player, who is a Canadian resident and citizen, but is currently not playing cards.

Can I move abroad, cut all ties with Canada to declare myself a non-resident, and live in a jurisdiction where online gaming winnings are taxfree?

Then, if I made, say, ~$1mm over a few years, I could repatriate that money when I move back to Canada?

Finally, if so, do you know which jurisdictions abroad do not tax poker winnings? Preferably some nice banana republic with awesome beaches?

Thank you

where is there a link for this. I would also like to know a list of countries that is tax free for online poker.
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Old 10-28-2008, 12:25 PM   #543
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Re: Canadian Online Poker Tax Thread

Somewhere earlier in this thread but it is easier to find it on CRA then in here

http://www.cra-arc.gc.ca/E/pub/tp/it...onsolid-e.html
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Old 10-28-2008, 01:55 PM   #544
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Re: Canadian Online Poker Tax Thread

Hello, I would like to know how can i be classified as a pro ? There is specific criteria ? If i make 8k/month for 6 month am i immediately classified as a pro ?
I never payed taxes on my poker winning and i have about 80k in winning..
If im not buying expensive stuff like a brand new car or something and im never making a withdraw with more than 10k, do i have a chance of getting audited or something ?
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Old 10-28-2008, 02:00 PM   #545
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Re: Canadian Online Poker Tax Thread

Each case is individual.

Based on what you gave us I'd say you should legally be declaring your poker income and paying tax. If you actually should you shouldn't is up to you to decide.

The $10k cashouts are with respect to FINTRAC not CRA. Just because you cash out in small amounts does not mean you'll go unnoticed.
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Old 10-28-2008, 02:05 PM   #546
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Snowman808 View Post
I never payed taxes on my poker winning and i have about 80k in winning..
If im not buying expensive stuff like a brand new car or something and im never making a withdraw with more than 10k, do i have a chance of getting audited or something ?
The odds are slim if you are careful with your expenses and how you cashout ( and even slimmer if you cashout less then 100k a year). Some people (Henry17 for ex.) say that some poker players have been audited in the past in Canada but the majority of us have not heard of such cases.

My guess is that they will crack down on a clear cut case at first (some guy cashing out 1 mill a year, no declared revenue, expensive cars etc.) and then if they want to they will go after the rest (which they haven't done for 5 years now).

Last edited by GuiGui_88; 10-28-2008 at 02:16 PM.
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Old 10-28-2008, 03:41 PM   #547
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Re: Canadian Online Poker Tax Thread

OK 2008 is my first year playing for a living with no other job.Lets say I am going to pay tax on my winnings,I make 100k online.CRA can easily find the transactions going into my bank that add up to 100k,BUT im a huge live game fish and i lose 60k in live games in 2008.I claim I made 40k? If this is the case I feel like there would be tons of loopholes seeing that casinos in Canada dont really track the money that comes in and out and everyone would claim the min and lose the rest live.
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Old 10-28-2008, 03:47 PM   #548
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Re: Canadian Online Poker Tax Thread

jrockhaf

That is not how it works. They don't audit you for poker transactions specifically. They look at your net worth and spending and assign a value. They don't even need to establish that the funds came from poker. They just need to establish that you have X and spent Y and then the onus is on you to refute CRA's over generous estimation of your undeclared income.
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Old 10-28-2008, 04:21 PM   #549
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Re: Canadian Online Poker Tax Thread

ok,whats the best way to get your money sent to you without setting off alarms,small amounts? I was keeping most online to stay in a certain tax bracket ,but i guess there is no sense
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Old 10-28-2008, 04:33 PM   #550
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Re: Canadian Online Poker Tax Thread

My online play is fairly minimal so I haven't given it much thought.

I don't think keeping more money than you need online is particularly smart. You are opening yourself up to the possibility of someone hacking your account or even the site just folding. You also have this money which is doing nothing. The inability to make the money work for you would cost you more than the income tax in a few years.

Short of laundering the funds though there is really very little you can do. Small things I would do would be don't use credit cards, don't brag to people about how much you make, keep cash outs to smaller amounts.
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