Two Plus Two Publishing LLC Two Plus Two Publishing LLC
 

Go Back   Two Plus Two Poker Forums > >

General Poker Discussion Discussion of other uncategorized topics related to poker.

Reply
 
Thread Tools Display Modes
Old 06-14-2009, 02:08 AM   #701
Bobo Fett
Carpe Diem
 
Bobo Fett's Avatar
 
Join Date: May 2006
Location: Canada, eh!
Posts: 52,389
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Eluvetie View Post
Wait...What...? Canadians have to pay taxes on winnings...?

If you don't have to pay taxes on B&M winnings, why do you have to pay it for internet winnings?
I know it's a long thread, but if you're really interested in the topic, you probably should read through at least some of it.
Bobo Fett is offline   Reply With Quote
Old 07-04-2009, 12:24 AM   #702
kimlee99
stranger
 
Join Date: Jul 2009
Posts: 2
Re: Canadian Online Poker Tax Thread

good thread. i have read a lot.

i started playing poker as a hobby. I work full time. I play at night and i spend may be 2/3 hours per day playing online poker and i win 100-500 dollars per day on average. I cash out to my bank account on a daily basis.

is it taxable? is it better i cash out monthly rather than daily?
kimlee99 is offline   Reply With Quote
Old 07-04-2009, 12:31 AM   #703
Equal
veteran
 
Equal's Avatar
 
Join Date: Apr 2004
Location: Vancouver players PM me!
Posts: 3,119
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by kimlee99 View Post
good thread. i have read a lot.

i started playing poker as a hobby. I work full time. I play at night and i spend may be 2/3 hours per day playing online poker and i win 100-500 dollars per day on average. I cash out to my bank account on a daily basis.

is it taxable? is it better i cash out monthly rather than daily?
Nope, you are 100% in the clear. I can personally guarantee it. paying taxes on that would just be wasting $$$. There's literally no way 10 CRA would come after you and 2) is they did they could win.
Equal is offline   Reply With Quote
Old 07-04-2009, 12:58 AM   #704
kimlee99
stranger
 
Join Date: Jul 2009
Posts: 2
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Equal View Post
Nope, you are 100% in the clear. I can personally guarantee it. paying taxes on that would just be wasting $$$. There's literally no way 10 CRA would come after you and 2) is they did they could win.
thanks for quick reply.

so cashing out daily should not matter?

i prefer to cash out daily so that i have access to that cash instead of it lying on my poker cash balance.
kimlee99 is offline   Reply With Quote
Old 07-04-2009, 07:54 AM   #705
TaxGuru
journeyman
 
Join Date: Nov 2008
Location: Canada
Posts: 219
Re: Canadian Online Poker Tax Thread

Your pattern of cashing out has no bearing on taxability.
TaxGuru is offline   Reply With Quote
Old 07-04-2009, 09:04 AM   #706
Henry17
Carpal \'Tunnel
 
Henry17's Avatar
 
Join Date: Aug 2007
Location: You've got a friend in me
Posts: 27,716
Re: Canadian Online Poker Tax Thread

It has no bearing toward taxability but might be an issue with respect to FINTRAC. A bank has an obligation to report suspicious activity and a daily $100-500 deposit from the same source looks like an attempt to circumvent the $10k reporting rule and would likely get flagged. That being said a once a month $10k deposit would definitely get reported so really you are no worse off.
Henry17 is offline   Reply With Quote
Old 07-07-2009, 03:57 PM   #707
clickabutton
banned
 
Join Date: Mar 2009
Posts: 939
Re: Canadian Online Poker Tax Thread

Bump.

I play poker professionaly since this year and I'm going to make about 100k$ this year. I have no job and am not a student so that's my main income. In the next year I plan on buying a car, and maybe eventually a house.

Should I def pay taxes?
clickabutton is offline   Reply With Quote
Old 07-07-2009, 04:27 PM   #708
TaxGuru
journeyman
 
Join Date: Nov 2008
Location: Canada
Posts: 219
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by clickabutton View Post
Bump.

I play poker professionaly since this year and I'm going to make about 100k$ this year. I have no job and am not a student so that's my main income. In the next year I plan on buying a car, and maybe eventually a house.

Should I def pay taxes?
Possibly, but no, not necessarily.
TaxGuru is offline   Reply With Quote
Old 07-31-2009, 03:26 PM   #709
BananaBalla
Pooh-Bah
 
BananaBalla's Avatar
 
Join Date: Sep 2007
Posts: 5,642
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by kimlee99 View Post
good thread. i have read a lot.

i started playing poker as a hobby. I work full time. I play at night and i spend may be 2/3 hours per day playing online poker and i win 100-500 dollars per day on average. I cash out to my bank account on a daily basis.

is it taxable? is it better i cash out monthly rather than daily?
Bump. I've spent some time skimming through the whole thread, and lots of good discussion, thanks to everyone who's contributed. I'm still a bit confused about under what circumstances we should be paying taxes.

Equal responded to this post saying that this person does not need to pay taxes. Am I right in assuming that as long as poker is a "hobby" and not your full time income, then it's not taxable? Even if you expect to make a positive expectation in your hobby...?

So what about full time students doing the same thing, playing about 1 hour an evening...?

Thanks!

Last edited by BananaBalla; 07-31-2009 at 03:45 PM.
BananaBalla is offline   Reply With Quote
Old 07-31-2009, 03:49 PM   #710
another loser
Guest
 
Posts: n/a
Re: Canadian Online Poker Tax Thread

If you have a reasonable expectation of profit you are legally supposed to pay taxes. It does not matter how often you play or if you have another job. These things are however important factors in whether you are likely to get caught if you choose not to pay.
  Reply With Quote
Old 07-31-2009, 04:02 PM   #711
Henry17
Carpal \'Tunnel
 
Henry17's Avatar
 
Join Date: Aug 2007
Location: You've got a friend in me
Posts: 27,716
Re: Canadian Online Poker Tax Thread

There is no answer because the law is vague. We have two practising lawyers and an unemployed guy with an LLB from a law school that was somewhat tax-centric and we can't agree on most situations.

Quote:
Am I right in assuming that as long as poker is a "hobby" and not your full time income, then it's not taxable?
No. If poker is your main source of income or a secondary source does not matter. The question of is it taxable income or a windfall is based on how you go about playing poker and has nothing to do with if you are employed or not. The reason employment matters is because of detection. If you have a job then assuming your employment income is greater than your poker income and sufficient to explain your lifestyle then it offers you some camouflage and makes it difficult to detect that you have undeclared income. A second reason I believe it will matter is in that the lack of employment implies that the individual expected to be able to pay the bills from poker.

Quote:
So what about full time students doing the same thing, playing 2-3 hours an evening...?
My interpretation is that legally you should be paying taxes if you have been a winning player for 6-8 months and you play a couple of hours every day. That you are a student is not a consideration. There is a four part test that has been mentioned multiple times in this topic. Someone who plays several days a week, is a winning player, has been at this for long enough that it is not just fluke (I figure 6-8 months is a good period), and studies the game either by reading books, 2P2, or using PT is taxable.

Now just because you are technically on the side that should be paying taxes doesn't mean you should. I don't believe anyone should pay income tax. Let CRA do the work -- they won't because they are lazy and not that bright -- of first getting a case where the law is made clear. Till that happens don't do anything. When they go after people -- and they will soon -- it won't be after the student who plays a few hours a day. Wait till they nail a pro and make the law clear then reevaluate what you want to do.
Henry17 is offline   Reply With Quote
Old 07-31-2009, 04:07 PM   #712
BananaBalla
Pooh-Bah
 
BananaBalla's Avatar
 
Join Date: Sep 2007
Posts: 5,642
Re: Canadian Online Poker Tax Thread

Ah okay, that makes a lot of sense now. Thanks for the quick and helpful reply.
BananaBalla is offline   Reply With Quote
Old 07-31-2009, 05:36 PM   #713
TaxGuru
journeyman
 
Join Date: Nov 2008
Location: Canada
Posts: 219
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
If poker is your main source of income or a secondary source does not matter. The question of is it taxable income or a windfall is based on how you go about playing poker and has nothing to do with if you are employed or not.
This is a little imprecise.

The question is whether poker is giving rise to income "from a source." The determination of whether a particular activity gives rise to characterization as income "from a source" is not entirely independent of whether one has employment (though it is very close to being independent).

Here's why. Theoretically, poker is an arm's race. As a matter of epistemology, it is impossible to state at any moment whether one is ahead or behind in the poker arm's race. A significant track record of success is one indicia, as is relying on poker for one's livelihood, because of what it reveals about one's state of mind.

This is why, in my considered view, being employed full-time and playing casually for an hour a day can be treated conceptually differently from playing an hour a day with exactly the same cash flows--it gives rise to a substantively and qualitatively different subjective expectation of profit, which will be related on average with a higher objective expectation of profit. Of course, there are deluded ("unlucky") losers and deluded ("pro") winners, too, which render this only an "on average" conclusion.
TaxGuru is offline   Reply With Quote
Old 07-31-2009, 06:59 PM   #714
Henry17
Carpal \'Tunnel
 
Henry17's Avatar
 
Join Date: Aug 2007
Location: You've got a friend in me
Posts: 27,716
Re: Canadian Online Poker Tax Thread

I think where we disagree is on poker being an arms race. Admittedly poker is more of a hobby for me but I have played the game for close to twenty years and I think winning players are winning players and losing players are losing players. You get situations like the influx of ******s after a big event like Moneymaker winning WSOP but that is an abnormality. I realize my view is a minority view among people who aspire to be poker pros but I don't see it as something that has this constant elevation in what is required to be a winning player but rather more as a binary situation.
Henry17 is offline   Reply With Quote
Old 08-08-2009, 02:28 AM   #715
YouSureSir
veteran
 
Join Date: Nov 2008
Posts: 2,069
Re: Canadian Online Poker Tax Thread

OK, so I understand that I should be paying taxes, I am fully a professional player since this year. What I am curious about, is if I don't pay taxes, and CRA comes after me in lets say two years, what will they do? Will they just backtax me for what they deem I should owe plus some percentage of interest on that money? Will they drop the interest that would have built up? I think I will pay taxes this year because I just don't want to have to worry about these things. I hate it being on the back of my mind, especially everytime I purchase something.

But I guess what I am asking is, with there being no confirmed causes where they have gone after a professional poker guy and won, and being that a lot of people think it is tax free, is the worst that could happen if they catch up to you and you didn't pay, is that you would owe the interest on top of the money you would have already owed if you had paid it each year?

Personally I think it is hard to tax because there are so many variables, I could move up to a higher limit tomorrow and go broke, or I could hit a really bad streak of variance. Unlikely but I think it should be taxed more like capital gains
YouSureSir is offline   Reply With Quote
Old 08-08-2009, 02:10 PM   #716
blindsRobber
adept
 
blindsRobber's Avatar
 
Join Date: Aug 2007
Location: blinds battling
Posts: 1,011
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by YouSureSir View Post
OK, so I understand that I should be paying taxes, I am fully a professional player since this year. What I am curious about, is if I don't pay taxes, and CRA comes after me in lets say two years, what will they do? Will they just backtax me for what they deem I should owe plus some percentage of interest on that money? Will they drop the interest that would have built up? I think I will pay taxes this year because I just don't want to have to worry about these things. I hate it being on the back of my mind, especially everytime I purchase something.

But I guess what I am asking is, with there being no confirmed causes where they have gone after a professional poker guy and won, and being that a lot of people think it is tax free, is the worst that could happen if they catch up to you and you didn't pay, is that you would owe the interest on top of the money you would have already owed if you had paid it each year?

Personally I think it is hard to tax because there are so many variables, I could move up to a higher limit tomorrow and go broke, or I could hit a really bad streak of variance. Unlikely but I think it should be taxed more like capital gains
It's taxed as business income not as a salary or capital gain. so if you have losses for one year you can deduct them from the taxable income of the three previous years or the 20 upcoming years as non-capital losses. So what that means is that in your losing year you get to deduct your losses on the T1 of the previous year (assuming you won and paid taxes) and you get a cheque as a rebate on taxes you've already paid. What's also great about non-capital losses is that you can deduct them from any other type of income, i.e. salary, capital gains, etc., not just business income

As for whether you should pay or not. While the law, the way it's written, makes a clear cut case that a full-time winning online poker player who studies the game must pay taxes, no one has been pursued for such taxes as of yet. I have a couple of friends who are studying tax law at Osgoode and both have said that I shouldn't pay any taxes on poker no matter how much I make. I showed them the law and my interpretation (the twoplustwo interpretation) and they agreed with that interpretation. However, after verifying with their profs, they told me that since there is no precedent yet, the worst that could happen if I don't pay taxes now is that I have to pay the back taxes in the future plus interest. It would be exremely unlikely that I'd have to pay a fine or go to jail because of the lack of precedent (pleading ignorance would be feasible). They even argued that I might be able to evade interest as well if back taxes were to be pursued.
blindsRobber is offline   Reply With Quote
Old 08-08-2009, 02:32 PM   #717
Henry17
Carpal \'Tunnel
 
Henry17's Avatar
 
Join Date: Aug 2007
Location: You've got a friend in me
Posts: 27,716
Re: Canadian Online Poker Tax Thread

It is not accurate that there is no case law on this. I can list at least a dozen cases where it clearly states that poker winnings are taxable for a professional player. The issue is only with what constitutes professional.
Henry17 is offline   Reply With Quote
Old 08-08-2009, 03:38 PM   #718
lozen
Carpal \'Tunnel
 
lozen's Avatar
 
Join Date: Mar 2005
Posts: 18,197
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
It is not accurate that there is no case law on this. I can list at least a dozen cases where it clearly states that poker winnings are taxable for a professional player. The issue is only with what constitutes professional.
Yes but there are strategies that can be used to declare the least amount of income yet be good with Revenue Canada
lozen is offline   Reply With Quote
Old 08-08-2009, 04:26 PM   #719
NL__Fool
veteran
 
Join Date: Feb 2006
Posts: 2,602
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by lozen View Post
Yes but there are strategies that can be used to declare the least amount of income yet be good with Revenue Canada
Would you care to elaborate?
NL__Fool is offline   Reply With Quote
Old 08-09-2009, 02:18 AM   #720
Chaser8
adept
 
Chaser8's Avatar
 
Join Date: Oct 2007
Location: Canada
Posts: 1,178
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
Now just because you are technically on the side that should be paying taxes doesn't mean you should. I don't believe anyone should pay income tax. Let CRA do the work -- they won't because they are lazy and not that bright -- of first getting a case where the law is made clear. Till that happens don't do anything. When they go after people -- and they will soon -- it won't be after the student who plays a few hours a day. Wait till they nail a pro and make the law clear then reevaluate what you want to do.
support of claim?
Chaser8 is offline   Reply With Quote
Old 08-09-2009, 02:40 AM   #721
lefty rosen
Pooh-Bah
 
Join Date: Apr 2003
Posts: 3,796
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by lozen View Post
Yes but there are strategies that can be used to declare the least amount of income yet be good with Revenue Canada
If you are worried about them getting after you. Go to any race track and scoop tickets off the ground and use that to offset your profits. Obviously you can only use so many dead tickets. But that can nullify a lot of tax money for the hobbyist/ low level pro.
lefty rosen is offline   Reply With Quote
Old 08-09-2009, 06:48 AM   #722
Henry17
Carpal \'Tunnel
 
Henry17's Avatar
 
Join Date: Aug 2007
Location: You've got a friend in me
Posts: 27,716
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Chaser8 View Post
support of claim?
Mostly based on history and social interaction with people.

Quote:
Originally Posted by lefty rosen View Post
If you are worried about them getting after you. Go to any race track and scoop tickets off the ground and use that to offset your profits. Obviously you can only use so many dead tickets. But that can nullify a lot of tax money for the hobbyist/ low level pro.
Will not work. A bunch of losing tickets does not change the fact that your net worth can not be explained by your reported income.
Henry17 is offline   Reply With Quote
Old 08-09-2009, 11:38 AM   #723
lozen
Carpal \'Tunnel
 
lozen's Avatar
 
Join Date: Mar 2005
Posts: 18,197
Re: Canadian Online Poker Tax Thread

Henry is so right. When all your money is strictly coming from poker and that is all you do. You will have no argument.

Keep in mind with tax law you are guilty till proven innocent.

Though like I said there are many strategies to pay the minimum
lozen is offline   Reply With Quote
Old 08-09-2009, 11:41 AM   #724
lozen
Carpal \'Tunnel
 
lozen's Avatar
 
Join Date: Mar 2005
Posts: 18,197
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by lefty rosen View Post
If you are worried about them getting after you. Go to any race track and scoop tickets off the ground and use that to offset your profits. Obviously you can only use so many dead tickets. But that can nullify a lot of tax money for the hobbyist/ low level pro.
Poor Strategy. Bottom line $ in and $ out.
lozen is offline   Reply With Quote
Old 08-09-2009, 12:18 PM   #725
4thstreetpete
Carpal \'Tunnel
 
4thstreetpete's Avatar
 
Join Date: Jul 2004
Location: Canada
Posts: 9,270
Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by lozen View Post
Henry is so right. When all your money is strictly coming from poker and that is all you do. You will have no argument.

Keep in mind with tax law you are guilty till proven innocent.

Though like I said there are many strategies to pay the minimum
Can you PM the strategies if you don't want to discuss it here? Thanks
4thstreetpete is offline   Reply With Quote

Reply
      

Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off


Forum Jump


All times are GMT -4. The time now is 05:10 PM.


Powered by vBulletin®
Copyright ©2000 - 2021, Jelsoft Enterprises Ltd.
Copyright © 2008-2020, Two Plus Two Interactive