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Old 01-08-2010, 03:13 PM   #976
Henry17
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Re: Canadian Online Poker Tax Thread

I think it would be better if TorontoCFE or TaxGuru elaborated as there were changes 5-6 years ago that I'm not completely familiar with.

Originally if I remember correctly income taxes had the same SoL as standard debt so six years for the federal part and the provincial part was governed by the provincial SoLs. If you filed your taxes and did not include the winnings the furthest back that CRA could go was six year. If you just did not file though they could go back indefinitely. Realistically though there is a limit to how far you can go back because of the costs involved but at least in theory they could.

At least that was how I remember it although I wouldn't trust myself which is why I would prefer if they answered the question.

If I'm not mistaken though SoLs changed in 2004 (100% sure of this in Ontario) but I think they also changed for income tax debt so even if I'm correct it is useless information since it changed.
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Old 01-08-2010, 04:31 PM   #977
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Re: Canadian Online Poker Tax Thread

They can generally go back 7 years (assuming honest mistake or omission ) but if you are suspected of fraud then there is no limit to how far they can legally go.
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Old 01-10-2010, 12:06 AM   #978
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Re: Canadian Online Poker Tax Thread

Hey, I am thinking about moving to BC this fall, any canadian players who want to PM to clarify the the poker online position there... flame on or whatever.. pretty drunk.. and didnt read most of the posts inthis thread
edit: would be happy to hear from any BC grinder

Last edited by dandelion; 01-10-2010 at 12:25 AM.
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Old 01-10-2010, 12:46 PM   #979
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Re: Canadian Online Poker Tax Thread

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Originally Posted by TorontoCFE View Post
They can generally go back 7 years (assuming honest mistake or omission ) but if you are suspected of fraud then there is no limit to how far they can legally go.
when i didnt pay taxes on my poker earnings, my accountant attached a annex mentioning how much in non taxable earnings i was making. because of this he said they can only go 3 years back
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Old 01-10-2010, 05:58 PM   #980
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Re: Canadian Online Poker Tax Thread

I've never heard of any reason why someone attaches notes to a tax return.

Either you have taxable income you report on a tax return or you have non-taxable income which you tell no one about because a tax return is for reporting your taxable income (with some exceptions like a capital dividend reporting).
It's like buying a new tv and telling the clerk you have more money in your wallet that you are using for groceries. Thanks for sharing but who really cares.
I suppose the logic is to head off future questions as to why you have more assets than your reported income can account for, but then you're telling the wrong person that.

You are required to maintain records for 6 years plus the current year for 7 years total. While an initial audit or information request usually covers the last 3 years, they certainly have every right to look back 6-7 years (most of the time they don't bother unless they find errors in the last 3 years and then they keep adding years until the stop finding errors).
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Old 01-11-2010, 06:50 AM   #981
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Re: Canadian Online Poker Tax Thread

I've got to agree with these observations. The best way to deal with it is to have a ready and complete explanation of why your gains are not taxable income immediately on hand. To be able to treat the exercise as one of educating the auditor has got to be of significant advantage. To the extent that you are able to show due diligence and a command of the legislation and case law, it will be to your advantage.
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Old 01-14-2010, 05:30 PM   #982
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Re: Canadian Online Poker Tax Thread

I don't really understand the true benefit of putting winnings under a corporation. If the corporation builds up assets, like a house and a car and bank accounts, and it is all taxed at the corporate rate, then you are still being taxed and when you want access to that money are you not going to be taxed again under personal tax? I understand whatever you take out as personal income is a writeoff for the corporation, but i'm more concerned about assets.

Say the corporation buys a house, but you want that house in your name, what kind of taxes would be involved in the switch?
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Old 01-14-2010, 05:34 PM   #983
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Re: Canadian Online Poker Tax Thread

Buying a house as a corporation wouldn't be very bright since that would make capital gains on the home taxable. Much better to have the corporation hold the mortgage on your home.
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Old 01-14-2010, 06:08 PM   #984
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Re: Canadian Online Poker Tax Thread

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Originally Posted by YouSureSir View Post
Say the corporation buys a house, but you want that house in your name, what kind of taxes would be involved in the switch?
You need to remember that whatever personal material benefits you realize as a shareholder from the corporation are taxed. You cannot simply have the corporation own assets that you use personally without having to include the fair market value of the use of those assets in your income. In this example, the full value of the house would be included in your income under s. 15 of the Income Tax Act as a shareholder benefit. The corporation would be deemed to have disposed of the house at its fair market value (which could lead to a taxable capital gain for the corporation).

Last edited by TaxGuru; 01-14-2010 at 06:10 PM. Reason: added more detail...
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Old 01-14-2010, 06:52 PM   #985
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Re: Canadian Online Poker Tax Thread

The benefit of using a corporate structure is that it allows tax deferral and income smoothing, not that you avoid the tax entirely.

If you want to own a home, you can have the corporation lend you the funds and you then repay your corporation. Buying a home is one of the exemptions for the taxation of shareholder loans so you don't have a personal taxable benefit.
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Old 01-14-2010, 07:24 PM   #986
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Re: Canadian Online Poker Tax Thread

Of course you should see a proper tax accountant if you want to do something like this because there are numerous potential pitfalls. Don't just forge ahead and assume you're alright--you need to read the Act and ensure you're in compliance. Or at least look at http://www.taxwiki.ca and read some of the relevant wiki bulletins.
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Old 01-14-2010, 07:50 PM   #987
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Re: Canadian Online Poker Tax Thread

The major complication is that you need to be able to prove that loans to buy a home are available to all employees and not just you or other shareholders. It can be difficult if you are the only employee to prove that you got the loan because you are an employee and not because you are a shareholder.

The other relevant exemption is to buy a vehicle for business purposes.

All other shareholder loans will give you a taxable benefit for the interest not paid back to the corporation (unless repaid in less than a year). Having a corporation buy a house outright is horribad.

Anyone doing business through a corporate structure should have individual tax advice because of the factors to consider.
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Old 01-15-2010, 04:15 AM   #988
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Re: Canadian Online Poker Tax Thread

I just realized that someone who claims poker winnings isn't only going to have to pay income tax on that but since the winnings are considered income from business activity they are also required to pay CPP. There goes another 9.9% off the top.
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Old 01-16-2010, 05:28 PM   #989
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Re: Canadian Online Poker Tax Thread

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I just realized that someone who claims poker winnings isn't only going to have to pay income tax on that but since the winnings are considered income from business activity they are also required to pay CPP. There goes another 9.9% off the top.
Oh well at least you get it back once you retire at 65.
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Old 01-19-2010, 06:00 PM   #990
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Re: Canadian Online Poker Tax Thread

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Oh well at least you get it back once you retire at 65.
is this how CPP works? I don't think it does, i think you get a portion of it back at retirement, or a pooled average depending on factors? But I'm sure people that contributed less get more than they contributed and people that contributed more get less than they contributed and somewhere in the middle there is a happy median where it works out such a way that they get a return of just what they contributed? I put question marks cause I have no real idea how it works that is just my logic speaking.... I like CPP if they give you back exactly what you contribute + interest accumulated....
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Old 01-19-2010, 07:10 PM   #991
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Re: Canadian Online Poker Tax Thread

even if that's how it works you would still have to live to be 65 or get screwed. i wouldn't like any investment i had to lock in for 40 years...
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Old 01-19-2010, 07:11 PM   #992
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Re: Canadian Online Poker Tax Thread

not to mention we have to assume the canadian government still exits in 40 years. just kidding. (sorta)
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Old 01-19-2010, 08:50 PM   #993
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Re: Canadian Online Poker Tax Thread

You are much better off taking CPP at 60 than 65.

It is still a horrible investment especially since as a self-employed individual you'd have to pay both your and the employer's half. That would be about $4000 a year for most people. Assuming you worked from 20 to 60 and then claimed it you'd need to reach the mid-90s to break even without even considering opportunity loss.
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Old 01-21-2010, 01:57 PM   #994
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Re: Canadian Online Poker Tax Thread

TD Canada Trust rejected my application today for a corporate checking account afte a 1 week "review" by their regional office. Not sure how I'm going to get a checking account for my numbered poke corp.
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Old 01-21-2010, 02:40 PM   #995
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Re: Canadian Online Poker Tax Thread

Did they explain why?

Did you tell them it was for poker?

TD has a very big US presence -- they have even bought naming rights to a stadium -- so I think they might be my last choice if I was going to actually claim it was a poker corp.
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Old 01-21-2010, 03:53 PM   #996
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Re: Canadian Online Poker Tax Thread

Yea from what I heard TD is usually the most anal concerning poker.

Never had a problem with BMO & RBC tho (although these arent corporate accounts), so maybe try those.
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Old 01-21-2010, 04:19 PM   #997
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Henry17 View Post
Did they explain why?

Did you tell them it was for poker?

TD has a very big US presence -- they have even bought naming rights to a stadium -- so I think they might be my last choice if I was going to actually claim it was a poker corp.
Yes, I was concerned about this fact - I applied at TD first because I was happy with my personal banking there.

They stated it was based on the relation to online gambling. I explained the purpose of the account was for poker. Since I had to go in and explain why I wanted to open a business account I pretty much had to say that the purpose of my business was playing poker if I wanted to be honest with them.
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Old 01-21-2010, 04:20 PM   #998
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Re: Canadian Online Poker Tax Thread

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Yea from what I heard TD is usually the most anal concerning poker.

Never had a problem with BMO & RBC tho (although these arent corporate accounts), so maybe try those.
Thanks, I'll give another bank a try. I think another Canadian had his RBC personal account closed in BC just for doing personal poker bank wires to his account Might just be that branch though.
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Old 01-21-2010, 05:09 PM   #999
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Re: Canadian Online Poker Tax Thread

I have an appointment with RBC tomorrow and they seemed way more amenable to the idea over the phone than TD, so I'll post results when I get them.
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Old 01-21-2010, 05:23 PM   #1000
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Re: Canadian Online Poker Tax Thread

I have accounts at pretty much every bank. A lot of it is branch manager dependent. My TD account they fully knew about the gambling and the manager was actually cool to the point where he Western Unioned me funds when I had hit my weekly ATM limit and had no cash while in Vegas. Manager changed all of a sudden bank became completely unusable and I was under major scrutiny.

Bank of Nova Scotia has closed my account twice. They seem like the most anal of the banks.

I would try CIBC or National. For people out in BC I would try VanCity -- never had an account there but I use to deal with Citizen's which was VanCity's online persona. Canadian Western is probably a good choice for people in Alberta for obvious reasons.
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