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Old 09-10-2009, 09:18 PM   #776
milliondollargame
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Re: Canadian Online Poker Tax Thread

Ok here is my situation.

I am a pro making almost all of my income from poker but i do have a casual job, making probably no more than 3-5k during this year. I keep this job just to say that i have a job obv if they come knocking i have no argument and would pay with no problems.

So should i even keep this job, my wife says that i should and i do to keep her happy but i don't really even like the job. Does this bring up the red flags having this very casual job?

My other question is if you don't have a job and you are traveling to the US and they ask where do you work what should you be telling these nosey pricks?

thanks guys
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Old 09-10-2009, 09:30 PM   #777
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Re: Canadian Online Poker Tax Thread

I'm of the opinion that the job does nothing for you. If you could make a reasonable argument of explaining your lifestyle and net worth with a combination of your wife's income and your casual income then sure but $2-3k isn't going to make a difference.

I use to say I was an articling student but now I just usually say I'm a lawyer. I'm not but it hasn't really caused any problems. I use to play Turning Stone so was crossing the boarder half-dozen times a month and it was fine. I told them I was unemployed once and they searched my car but then let me proceed. My GF owns a business so in the future I'll likely say I work there. It really has never been an issue. They just need to know that you have ties to Canada and that you plan to return.
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Old 09-13-2009, 06:25 PM   #778
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Re: Canadian Online Poker Tax Thread

I have a question about becoming a resident of another country for tax purposes. What happens if after several years of living abroad I decide to return to Canada. I read this page (http://www.cra-arc.gc.ca/tx/nnrsdnts...nwcmr-eng.html), but I am not clear on everything.

Does this mean that I can bring all my property back to Canada more or less tax free? I am mostly interested in investments and my bankroll, but I might also acquire other property while abroad. Is there anything in particular I should consider in planning for this event?
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Old 09-13-2009, 07:59 PM   #779
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Re: Canadian Online Poker Tax Thread

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I have a question about becoming a resident of another country for tax purposes. [...] Does this mean that I can bring all my property back to Canada more or less tax free? I am mostly interested in investments and my bankroll, but I might also acquire other property while abroad. Is there anything in particular I should consider in planning for this event?
Reestablishing residence in Canada is likely to not be a huge event in terms of Canadian tax. In large part the principal consequences depend on the tax law of the other jurisdiction. Some countries will want to claim tax on gains accrued on capital while you were a resident there, for example.
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Old 09-14-2009, 05:57 PM   #780
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Re: Canadian Online Poker Tax Thread

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Three years ago I had a normal job (skilled trade) and then the economy when to ****. My only option was to move to alberta (i'm from ontario) The first year I collected EI and learned how to play online poker. For the last two years ive made more than my old job. I own two rental homes (i bought before I got laid off). and only pay income tax on them, which after all the deductions is below the $10K mark. I put my Moms house as my primary residence (which I do live a few months out of the year). I have lived in Vegas, Cali, Montreal and Florida. ( i have dual citizenship) I use my click2pay debit card for everything and pay cash for everything. My car is my moms name and if I decide to move back to Ontario in one of my rental houses, I would only deposit the min. in my bank account, I need to live and pay cash for everything else.

For travel get a prepaid visa to book everything and pay cash for the rest. So it is possible to live a normal life living off cash.
Can CRA not see a name attached to click2pay debit card? Same with the otherones like entroPay or moneybookers. I wonder, if CRA audits you, is there any access to these records?
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Old 09-14-2009, 06:06 PM   #781
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Re: Canadian Online Poker Tax Thread

They don't need to. You are using these cards to get cash. Now that you have this cash you have to do something with it. If you put it into a bank account, trading account, but big ticket items, etc.. they can trace that a lot easier. CRA does not have to prove that you even play poker. They only have to establish that you have stuff and then the onus is on you to explain how you can afford to have that stuff.
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Old 09-16-2009, 12:57 AM   #782
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Re: Canadian Online Poker Tax Thread

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They don't need to. You are using these cards to get cash. Now that you have this cash you have to do something with it. If you put it into a bank account, trading account, but big ticket items, etc.. they can trace that a lot easier. CRA does not have to prove that you even play poker. They only have to establish that you have stuff and then the onus is on you to explain how you can afford to have that stuff.
Yes I know, i just mean, if I declare x amount which is relative to my rent, food, etc, but just use an entropay card or something to take out money for entertainment, movies, drinking, eating out, partying, trips etc.... Would they be able to track those?
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Old 09-16-2009, 02:22 PM   #783
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Re: Canadian Online Poker Tax Thread

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Just had another thought.. would starting to pay taxes in any given year on poker income for the first time potentially increase your risk of the CRA wanting to backtrack and look into your past years?
Not in my experience.

When it comes to going back, that generally happens only if you come under investigation for some reason and the one yera they are looking at comes back with questions.
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Old 09-16-2009, 02:34 PM   #784
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Re: Canadian Online Poker Tax Thread

[QUOTE=Lefort;13041814]
4) If I was ever faced with the dreaded phone call from the CRA, what would be my best way to handle the situation? I mean it's obvious that lying would be a seemingly stupid risk, but how about deleting all software and such? What types of things would we want to focus on as our argument for not paying taxes in the past?
QUOTE]

If you get the call then it would be to set up a meeting to go over questions they have. You wouldn't offer any information without speaking to a lawyer or accountant so you have the time to prepare.
Once the questions start, then you better be ready to explain how you have been able to afford to live your lifestyle. If you have no other plausible explanation other than poker (gifts, inheritance, charity, unreported or insignificant work will all raise more questions for you and other people who won't appreciate getting involved) then you will have to explain why you shouldn't be considered a professional player.

This argument would center around either how your winnings came bunched up and are inconsistent or how little you play but did really well for a short period of time. You don't offer your PT OR HEM records (never mentioning they exist unless asked).

If they don't believe you and send you an assessment including poker income then you need a layer or accountant who knows this area
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Old 09-16-2009, 02:37 PM   #785
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Re: Canadian Online Poker Tax Thread

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Originally Posted by YouSureSir View Post
Yes I know, i just mean, if I declare x amount which is relative to my rent, food, etc, but just use an entropay card or something to take out money for entertainment, movies, drinking, eating out, partying, trips etc.... Would they be able to track those?
Probably but not routinely so if there is no reason to investigate you then they wouldn't see anything.

They don't know about your bank records, visa bills, travel history, etc. unless they have reason to specifically look for them, which means they are investigating you which means something or someone tipped them off.
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Old 09-16-2009, 02:38 PM   #786
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Re: Canadian Online Poker Tax Thread

Never destroy records. That's just a very bad idea. The records can help you significantly, since the onus is on you to disprove the assertions the tax authorities may make about your apparent income through a net worth audit. I understand that they tend to err on the side of overestimating what your lifestyle suggests, so in the worst case, if nothing else, your records might substantiate a lower amount. Also, don't over-estimate how willing the courts are to tax gambling gains from poker. There hasn't been a reported decision in 50+ years that has come down on that side of the question.
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Old 09-16-2009, 02:42 PM   #787
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Re: Canadian Online Poker Tax Thread

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2) Just how ugly does it look to the CRA when I am receiving rental income from a property while also having capital gains on (large) investments, while having zero declared source of work/career since graduating school in '08? Does this make me a great candidate to be red flagged and taken to court?
.
This actually is a very large red flag (actually this is the biggest red flag I
can think of, even bigger than having your face on TV receiving a cheque for winning your 3rd bracelet)
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Old 09-16-2009, 03:11 PM   #788
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Re: Canadian Online Poker Tax Thread

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That wasn't what they meant. That is just moving the debt servicing costs from the home to your investments. They claim to actually make the mortgage itself deductible. The only way to do that is to somehow make the property an investment so I figured have something like having a corporation or trust own the home and rent it to myself but then you run into capital gain issues unless that is the catch. They never did say that manoeuvrer would not subject you to capital gains only that the servicing costs would be tax deductible.
The most common way of getting the interest deductible would be to get your RRSP to buy the mortgage from the institution holding it. This would make the interest ductible as a business expense.

There is no way of making the entire payment deductible because principal payments are just equity transactions that don't attract tax and thus can never give tax credits or deductions.
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Old 09-16-2009, 06:25 PM   #789
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Re: Canadian Online Poker Tax Thread

welcome back TorontoCFE

Henry17 and TaxGuru has been a tremendous help while you were away.
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Old 09-16-2009, 07:26 PM   #790
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Re: Canadian Online Poker Tax Thread

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welcome back TorontoCFE

Henry17 and TaxGuru has been a tremendous help while you were away.

Thanks - a summer of mostly vacation and a break from poker due to my stupidity after 1 too many bad beats combined with seeing the same questions over and over led to me being offline recently.
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Old 09-17-2009, 02:35 PM   #791
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Re: Canadian Online Poker Tax Thread

talked to my cousin today who is a financial planner for IGM Fianancial Canada. he consulted with a tax lawyer that works for his company. they said that i absolutely should be paying taxes because im running it like a business.

this is all old news of course, but he was pretty adamant on me paying taxes. he said if they wanted to penalize me it would be: 25k for every year not paid + 1% interest.
obviously this is pretty scary. he also said that i can have a tax lawyer claim "amnesty" for me and i wouldnt have to pay any of these fees (this has been mentioned in this thread before.)

my cousin said that for how much money ive made playing poker (high 6 figures) that it would probably be about a 30k fee to sort out my taxes. also, i would be paying 40% (i live in bc.)

paying all this would basically wipe out all of my savings, and i dont think im going to pay.
just an fyi for you guys. im sure there's a lot of you out there in my position.

Last edited by homeboy604; 09-17-2009 at 02:44 PM.
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Old 09-17-2009, 02:43 PM   #792
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Re: Canadian Online Poker Tax Thread

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this is all old news of course, but he was pretty adamant on me paying taxes. he said if they wanted to penalize me it would be: 25k for every year not paid + 1% interest.
The penalty is actually 5% of the tax not paid + 1% per month to maximum 12 months plus interest plus interest on the penalty.

That you can get reduced or waived if you have an accountant or lawyer request taxpayer relief.
It is almost certain they would waive the penalty if you amneded the returns.
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Old 09-17-2009, 03:17 PM   #793
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Re: Canadian Online Poker Tax Thread

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The penalty is actually 5% of the tax not paid + 1% per month to maximum 12 months plus interest plus interest on the penalty.
That is for the first time but isn't it more for the second time?

So if you haven't paid taxes for 4 years would you get the 5%+1% for all four years or just for the first year and the higher penalty for the other three years?
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Old 09-17-2009, 04:25 PM   #794
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Re: Canadian Online Poker Tax Thread

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That is for the first time but isn't it more for the second time?

So if you haven't paid taxes for 4 years would you get the 5%+1% for all four years or just for the first year and the higher penalty for the other three years?
Each time you after the first it is 10% + 2% per month to a max of 20 months so it is slightly more than double and this is for late filing. However, the doubling applies once you've late filed before in the last 5 years and been assessed penalties and not by how many years you haven't filed for.

Actively not reporting income is technically more, interest plus up to 200% of the tax evaded and up to 2 years in jail (though of course it is almost always 100% fine and no jail).
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Old 09-17-2009, 04:37 PM   #795
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Re: Canadian Online Poker Tax Thread

Ok so I have a friend who has not filed for three years. She plans to get caught up in 2010 and file all four years. The amount is low enough that going to a lawyer would cost more than her penalties but originally I told her it would be 17% + interest for 2006 and double that for 2007 and 2008 but if she files them all at the same time she should only get the 17% across the board?
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Old 09-17-2009, 04:42 PM   #796
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Re: Canadian Online Poker Tax Thread

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Ok so I have a friend who has not filed for three years. She plans to get caught up in 2010 and file all four years. The amount is low enough that going to a lawyer would cost more than her penalties but originally I told her it would be 17% + interest for 2006 and double that for 2007 and 2008 but if she files them all at the same time she should only get the 17% across the board?
That is my understanding, as long as she hasn't been fined in the last 5 years for not filing.
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Old 09-17-2009, 05:44 PM   #797
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Re: Canadian Online Poker Tax Thread

Moneybooker's is finally having their mastercard debit card for vips. Can I get your guy's opinion on using the debit card for cashout. Good idea?
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Old 09-17-2009, 05:59 PM   #798
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Re: Canadian Online Poker Tax Thread

It depends on what you plan to do with the money. If you are just going to take it out with the ATM and put it in the bank then it offers only a small benefit over any other cashout method that does not get FINTRAC attention. If you plan to spend the money on stuff that doesn't register, launder the money, or keep it in a cardboard box under the bed then it is worth very much worth using.

After almost a year Click2Pay finally processed my Click2Pay ATM card today. I would much prefer a Moneybookers one. How does one qualify for VIP?
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Old 09-17-2009, 06:14 PM   #799
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Re: Canadian Online Poker Tax Thread

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It depends on what you plan to do with the money. If you are just going to take it out with the ATM and put it in the bank then it offers only a small benefit over any other cashout method that does not get FINTRAC attention. If you plan to spend the money on stuff that doesn't register, launder the money, or keep it in a cardboard box under the bed then it is worth very much worth using.

After almost a year Click2Pay finally processed my Click2Pay ATM card today. I would much prefer a Moneybookers one. How does one qualify for VIP?

Being a moneybooker's vip is great. I got a 1% cashback on all transfers to poker sites this month (awesome!). Occasionally I would get vip managers emailing me about what they can do to make the vip program better and even set up face to face meetings in your town.

I heard it's pretty easy now, just send them an email telling them you want to be a vip. I think you will then have to transfer about 10K in the month to qualify and that's pretty much it. If you have 10K sitting in your poker account, just move them from site to site and you should be set. This is what I've heard some do to get vip status but don't quote me on that. As for me I was moving quite a bit of money around sites previously so they contacted me about being their vip and that was it.

Regarding the mastercard debit card, since it's from mastercard does it leave a trail behind when you're accessing it on ATMs? (Noobie question)
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Old 09-17-2009, 06:31 PM   #800
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Re: Canadian Online Poker Tax Thread

I don't know enough about how the Mastercard system works but my understanding is that if they knew about it they could get records but it would be too much effort to make it worth doing. Just using the card won't trigger anything so they would have to be already interested in you to find out about the card. Even then there is a good chance they wouldn't ever find it or if they did that getting the records would be more effort than it is worth.
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