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Old 03-02-2010, 05:11 PM   #1101
TorontoCFE
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Re: Canadian Online Poker Tax Thread

It is a little pricey but standard- you can essentially do this yourself in 2-3 hours effort.


You only have to mention it for Canadian tax prep if you are filing the winnings as income (ie as a pro here).

Otherwise the income is not taxable and the tax deducted (if not fully recovered by then) is not claimable in Canada.
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Old 03-03-2010, 02:06 PM   #1102
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Re: Canadian Online Poker Tax Thread

Hey guys,

I was wondering if I could get some help here from people with experience before turning to the CRA. I play poker on the side as a student for now and plan on going full-time in May. I have a few questions concerning withdrawals and stuff, hopefully someone here has some experience in the province of Quebec.

1. Will a bank start an investigation if i withdraw more than $1,000 by cheque? (I currently withdraw just under $1,000/week just because i'm not sure if they will investigate.)

2. A)Should I contact the CRA and declare my winnings or not? The area of them being taxable is super vague obv. I've been withdrawing streadily for about 8 weeks and plan on continuing to do so (would rather be making larger withdrawals than < $1000). Is there another way to do so instead of a check by mail?

B) Also, I'm going to buy a house soon too. It would behoove me to figure out if I should declare my winnings to the tax man before I buy a house. I don't want them showing up at my door and saying "How the hell do you have a house when you don't evehave a job?"
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Old 03-03-2010, 02:53 PM   #1103
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Re: Canadian Online Poker Tax Thread

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1. Will a bank start an investigation if i withdraw more than $1,000 by cheque? (I currently withdraw just under $1,000/week just because i'm not sure if they will investigate.)
Investigate what? Banks don't care that you play poker or about income taxes. They have certain criteria they have to meet with respect to criminal activity monitoring but that is it.

Quote:
2. A)Should I contact the CRA and declare my winnings or not? The area of them being taxable is super vague obv. I've been withdrawing streadily for about 8 weeks and plan on continuing to do so (would rather be making larger withdrawals than < $1000). Is there another way to do so instead of a check by mail?
So you have been winning for eight weeks and you are already concerned about this? I'd say wait until you have been doing it at least year.

Quote:
B) Also, I'm going to buy a house soon too. It would behoove me to figure out if I should declare my winnings to the tax man before I buy a house. I don't want them showing up at my door and saying "How the hell do you have a house when you don't evehave a job?"
You need to give a lot more details to know if they is a risk or not. From 1A) it doesn't seem like poker has provided you with enough in winnings to buy a house. So either I'm reading the previous question wrong or the source of the funds is something other than poker.
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Old 03-03-2010, 10:42 PM   #1104
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Re: Canadian Online Poker Tax Thread

Sorry guys, didnt give enough info. I've been playing 15 months and kept all my winnings online to build my roll to play mid-high stakes. Recently, I have been making regular withdrawals, every week of about 1k$ so I can put a downpayment on a house. I wanna know if I can withdraw more than $1k a week without a hassle from the bank and without a hassle from the taxman.

The 8 weeks hardly seems enough to be judged as grounds of reasonable expectation profit and could hopefully fall under windfall, since I don't think CRA knows how to look at how the money was actually won (i.e. maybe I won a tournament online, who knows ).

Quote:
Investigate what? Banks don't care that you play poker or about income taxes. They have certain criteria they have to meet with respect to criminal activity monitoring but that is it.
I was told that if you have a check from an "online merchant" over $1,000, they investigate where it comes from, I don't know if it's true, I just wanted to validate it.

Quote:
So you have been winning for eight weeks and you are already concerned about this? I'd say wait until you have been doing it at least year.
I don't know why you are taking this tone, I must have worded myself wrong. I have not been winning 8 weeks, I have been withdrawing regularly for 8 weeks, prior to this I kept all my winnings online. I am concerned because I know it will become a regular habit and want to be well prepared.

Quote:
You need to give a lot more details to know if they is a risk or not. From 1A) it doesn't seem like poker has provided you with enough in winnings to buy a house. So either I'm reading the previous question wrong or the source of the funds is something other than poker.
I have been withdrawing enough that I soon plan on putting a down payment on a house. Obviously, I will have to make regular mortgage payments, so that's the reason I'm enquiring about larger than $1k checks. It is also the reason why I want to know if my winnings will be taxed. See background info above.

Thanks for the feedback Henry17. With this more detailed info at hand, can you guys help me more?
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Old 03-04-2010, 06:30 AM   #1105
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Re: Canadian Online Poker Tax Thread

1) I am not aware of anything related to banks investigating cheques greater than $1000 from online merchants. The only concern that I'm aware of is that the bank will report you to FINTRAC for suspicious transactions usually that involves amounts of $10k or more. The only time amounts less than $10k are reported is if the pattern looks like you were intentionally trying to avoid hitting the $10k trigger.

2) If you have been winning consistently for a year and a half then yes you are likely legally taxable. That being said if you don't report it the chance of ever having any issues is very very small. The consequences should you get caught are also likely not that significant if you do nothing to actively hide winnings and are able to pay. I think that makes it +EV to not report but that is a personal decision based on your risk tolerance, morality toward taxes, and how visible you are.

3) Getting a mortgage is going to be an issue. Anti-money laundering legislation requires that the source of down-payment have a 90 day history. You need to get a second bank account to keep the down-payment funds separate from cash outs. You also can't just apply for a normal mortgage -- you'll need what is called a NIQ mortgage. These are considerably harder to get and typically you are looking at 65% LTV although I do have someone who claims they can do 80% LTV but I'm not certain if he is going to pull it off. You are going to have to explain the source of future payments to the lender which means putting something on paper about your pro status. That could cause future issues should CRA ever come around.
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Old 03-04-2010, 01:46 PM   #1106
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Re: Canadian Online Poker Tax Thread

So basically, if I do want to get a mortgage on a house, it would be very hard to do so without declaring my winnings to the CRA? If so, then god that sucks. Is there any other way to go about doing this?

What is LTV?

Thanks Henry, appreciate your feedback
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Old 03-04-2010, 01:49 PM   #1107
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Son Of John View Post
So basically, if I do want to get a mortgage on a house, it would be very hard to do so without declaring my winnings to the CRA? If so, then god that sucks. Is there any other way to go about doing this?

What is LTV?

Thanks Henry, appreciate your feedback
Go to a mortgage broker, tell him your situation, he will give you a loan
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Old 03-04-2010, 02:57 PM   #1108
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Re: Canadian Online Poker Tax Thread

Just found this thread in NVG:

https://forumserver.twoplustwo.com/29...coming-726725/

First I've heard of that.
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Old 03-04-2010, 04:29 PM   #1109
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Son Of John View Post
So basically, if I do want to get a mortgage on a house, it would be very hard to do so without declaring my winnings to the CRA? If so, then god that sucks. Is there any other way to go about doing this?
No but to get a mortgage you are going to have to go on the record as being a professional player with your lender. I'm not sure what kind of power CRA has to obtain those documents but I think they would be able to.

Quote:
What is LTV?
Loan to Value. Basically you need a 35% down-payment to get a mortgage as a poker pro. Some brokers claim to be able to get you one with 20% down but that is untested. 35% down though and clean credit you'll be fine in any major city.
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Old 03-04-2010, 05:34 PM   #1110
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Re: Canadian Online Poker Tax Thread

just gonna copy paste from what i wrote from another thread so we can continue discussion here if you would like

the only case of a gambler losing in court is Luprypa v. The Queen7, where the appellant spent three years playing pool for money five days per week. Each evening he would attend a bar where he would play against opponents who were inebriated, while he would remain sober. He made $16,000 in 1989, $20,000 in 1990 and $40,000 in 1991. In finding that the taxpayer’s winnings constituted income from business, McArthur J. analyzes some of the jurisprudence on the taxability of gambling gains.

Obviously there is alot less luck factor if any in pool compared to poker


the sports betting case, I Dont know if you ever read about the leblanc case where they won in court, they were professional sports bettors, that won millions of dollars
Leblanc v. The Queen decided by the Tax Court of Canada in 2006.4 From 1996 to 1999, following a win of a substantial sum, the brothers Brian and Terry Leblanc began playing sports lotteries four to five times per week, betting between $200,000 and 300,000. They chose which combinations to play with the assistance of a computer program which significantly increased their potential payout and risk, yet they lost 95% of the time. The brothers’ total net winnings was $2,761,544 each. In the Minister’s assessment for the period in question, he claimed that the brothers were in the business of wagering on government-run sports lotteries in an organized fashion, and that they had developed a system that ensured that if they won, they would win significant amounts. The Tax Court of Canada allowed the taxpayer’s appeal, holding that they were not professional gamblers who assessed and minimized their risks, relying on outside information, knowledge and skill. Games of pure chance, like lotteries, do not constitute trade and therefore the activities were simply of a personal nature.


Leblanc brothers bet about $52,000,000 over a four year period, with each winning approximately $2.7 million. the brothers devoted significant resources to the activities. The brothers both rented a house near the Quebec-Ontario border so that they could play both provincial lotteries as well as enlisted up to 15 people to purchase the tickets from retailers since there were limits on sales of lottery tickets to one individual. Furthermore, the Minister in the case contended that their winnings were due to a “system” they developed, whereas the brothers contended that they were lucky. The minister argued that the large volume of purchases demonstrates the presence of a system, therefore indicating the presence of a business. The Court in Leblanc rejected this contention stating that large volume is not an indication of a business and that the “complexity of their purchasing pattern was the result of the OLG’s imposition of limits on the number of wagers per ticket and sales per outlet. If there were no such limits, the appellants could have purchased a few, high-wager tickets at a single location.”


According to Canadian Gaming Lawyer Magazine , Luprypa is the only Canadian case where gambling winnings were ruled to be taxable even though the winnings had no connection to a previously established business or occupation. As we see from the factors cited by the Court in that case, skill is a key factor.

sorry for my ******ed way to post

In Stewart v. The Queen, Iacobucci and Bastarache JJ. of the Supreme Court discussed the question of whether a “reasonable expectation of profit” test is appropriate for determining whether the taxpayer has a business or property source of income. In short, the Court exhibits reluctance to rely on a “reasonable expectation of profit” (REOP) test to assess whether a taxpayer is carrying on a business. The Court holds that “in our view, the range of uses and interpretations that courts have given to the phrase ‘reasonable expectation of profit’, and the corresponding uncertainty this has created for the taxpayer, are illustrative of the dangers inherent in this type of judicial exercise.”1 One difficulty with the test is that it is vague. For example, a high-risk venture may lead to substantial losses, the claims of which would, under the REOP test, be disallowed. Given its vagueness and uncertainty of application resulting in unfair and arbitrary treatment of taxpayers, the Supreme Court rejects the REOP approach.

Instead, the Court opts for a “Source of Income” approach. Under this approach, there should be a two-stage inquiry. First, it should be asked whether the activity of the taxpayer is undertaken in pursuit of profit, or whether it is a personal endeavour. Second, if it is not personal, then it must be asked whether the source of income is business or property. The Court notes that the first stage of the test can be restated as follows: “Does the taxpayer intend to carry on an activity for profit and is there evidence to support that intention?” The dominant intention of the taxpayer must be to make a profit from the activity and the activity must be carried out “in accordance with objective standards of businesslike behaviour.”

In Balanko, the taxpayer derived income from wagers on horse races, sporting activities and card games. In adopting the Tax Review Board’s reasons as his own, Collier J. holds that the mere taking of risks on the part of the taxpayer does not equate to risk management or minimization and therefore the income derived should not be taxed. A very telling example for our purposes is cited, that of an insurer, where attention would be paid to the statistical incidents of losses in deciding whether to insure and the extent of coverage. Further, Collier J. adopts the Board’s finding of a “total absence of any evidence here which indicates the presence of any organized system for the minimization or management of risk.” The lack of a system, the Board states, distinguishes the intemperate gambler from the professional one.
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Old 03-04-2010, 07:10 PM   #1111
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Re: Canadian Online Poker Tax Thread

Many things have changed since the court cases.

Relying on them as precedent isn't foolproof.
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Old 03-06-2010, 09:33 PM   #1112
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Re: Canadian Online Poker Tax Thread

Gone through about a dozen pages here. Couple questions still. Assume 100k$+ Cdn online winning regular.

1.If you aren't declaring your taxes (as the likelyhood of being caught is small and the penalty is not great), are you even filing a tax return at all?

2.What do you think the penalty would be if caught, say 5 years down the road? Would it be the complete payment of all taxes the CRA deems you owe, based on the estimated yearly income deduced from your lifestyle/property/etc?

And suppose you made 15% interest on all your winnings over those 5 years, would the CRA still just demand the estimated income tax owed per year, or the yearly income tax, plus interest?

3.There was a suggestion to "incorporte". Quick explanation of what that would mean and the benefits?

4.Any possiblity of harsher penalities, assuming you plead ignorance and didn't avoid the taxes?

I imagine some of these have been answered, I'll keep searching. Thanks.
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Old 03-06-2010, 09:40 PM   #1113
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Re: Canadian Online Poker Tax Thread

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Originally Posted by banalanal View Post
Gone through about a dozen pages here. Couple questions still. Assume 100k$+ Cdn online winning regular.

1.If you aren't declaring your taxes (as the likelyhood of being caught is small and the penalty is not great), are you even filing a tax return at all?

2.What do you think the penalty would be if caught, say 5 years down the road? Would it be the complete payment of all taxes the CRA deems you owe, based on the estimated yearly income deduced from your lifestyle/property/etc?

And suppose you made 15% interest on all your winnings over those 5 years, would the CRA still just demand the estimated income tax owed per year, or the yearly income tax, plus interest?

3.There was a suggestion to "incorporte". Quick explanation of what that would mean and the benefits?

4.Any possiblity of harsher penalities, assuming you plead ignorance and didn't avoid the taxes?

I imagine some of these have been answered, I'll keep searching. Thanks.
They don't just take what you should have paid for the past five years. They take that AND interest (which is very high!!). Furthermore, they can claim exorbitant estimates for what your income was and the onus is on you to prove otherwise. Guilty until proven innocent.

I'm thinking about all this the same as you. I'm in my 2nd year now full time. I don't know if I'll keep doing this (I just got a degree 18 months ago and taking some time off), so I don't really want to pay tax for my first year.

But if I continue for 5 years, I prob will. Forget about risking the consequences. I want to use the roads, I use public health care, I call the police if my car is stolen....ect...ect. I want to be able to look my fellow Canadians in the eye and have some self respect. Not just leach off of society.
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Old 03-06-2010, 10:01 PM   #1114
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Re: Canadian Online Poker Tax Thread

Yes, obviously morally, there is nothing to debate. It is lecherous to not pay taxes. However, hypothetically, claiming 70% could be morally justifiable. I wonder what the penalties would be if caught? How easy or hard it would be to cover your tracks, or are there legal means of tax avoidance?
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Old 03-06-2010, 10:10 PM   #1115
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Re: Canadian Online Poker Tax Thread

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Originally Posted by banalanal View Post
Yes, obviously morally, there is nothing to debate. It is lecherous to not pay taxes. However, hypothetically, claiming 70% could be morally justifiable. I wonder what the penalties would be if caught? How easy or hard it would be to cover your tracks, or are there legal means of tax avoidance?
If I had to guess the problem with claiming only 70% is if you do get audited, they can make up a number much larger than the 30% discrepancy and the onus is on you to prove otherwise. The only way to prove yourself would be to show them your bank records ect. By doing this however you will out yourself as a liar though and could possibly get criminally charged with tax evasion. But if you don't do it you have to pay a larger amount than the tax on the 30% + back interest....ouch.

I think it's best to do all or nothing. By claiming 70% you are officially claiming poker as a profession. So you lose the ability to be able to go to court and take the stance that you've just been gambling and lucky. So why pay all that tax on 70% of your earnings when you could end up just as screwed as the guy who paid nothing...actually more screwed.

This is just how I'm thinking about it. I'm taking my old mans advice and I'm seeing an accountant and a tax attorney at the end of this year. You really need to directly speak to a professional about your particular case IMO.
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Old 03-06-2010, 10:54 PM   #1116
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Re: Canadian Online Poker Tax Thread

It should be recognized that the all or nothing solution is only as of any particular moment. The real choice in the context of the income taxation of poker winnings is about the transition from considering poker winnings "casual" to considering them "professional."
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Old 03-06-2010, 11:06 PM   #1117
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Re: Canadian Online Poker Tax Thread

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It should be recognized that the all or nothing solution is only as of any particular moment. The real choice in the context of the income taxation of poker winnings is about the transition from considering poker winnings "casual" to considering them "professional."
Could you elaborate more? I played less than 700,000 hands in 2009. I realize due to the extremes of variance I could just be a very bad player and not realize it yet because I've had good luck (even though I feel like I've had more than my share of bad beats, ect).

But the point is nobody can clearly define the minimum number of hands that you need to analyze before you can clearly know your win rate. Ya, I know you hear 50k is good for an accurate estimate, but 1 million is better, ect. Also I've seen the graphs for variance based on decent win rates. Someone with a 3bb/100 can have a -100,000 year if they're really on the bottom end of bad luck.

So I file and claim my poker income for 2009 and then what if 2010 ends up going really sour? What if I break even for 2010? Then I can't claim I'm professional anymore....but do I get the tax I paid in 2009 back? All this seems really dodgy. I think I want to be at least in my third year before I consider paying anything and then maybe I can think about back taxes....but then there is interest....sh*T.

CRA needs to be much more clear on this issue if they want to take our money IMHO.
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Old 03-06-2010, 11:13 PM   #1118
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Re: Canadian Online Poker Tax Thread

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Originally Posted by ebffs View Post
So I file and claim my poker income for 2009 and then what if 2010 ends up going really sour? What if I break even for 2010? Then I can't claim I'm professional anymore....but do I get the tax I paid in 2009 back? All this seems really dodgy. I think I want to be at least in my third year before I consider paying anything and then maybe I can think about back taxes....but then there is interest....sh*T.

CRA needs to be much more clear on this issue if they want to take our money IMHO.
You make a decision going forward at some stage that you'll be playing as a pro going forward. If you subsequently break even, you're still a pro. If you lose money, you're still a pro and can deduct losses against other sources of income (and can carry those losses back and forward several years). The CRA will question your losses, but if you previously reported gains, will be more accommodating.

The CRA doesn't have to show a 99.9% chance of winnings, just a "reasonable expectation of profit." The best way to make sense out of the various holdings and comments in the case law on this question, though, is that it takes volume, effort, systematic pursuit, and winnings to make a poker pro.
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Old 03-06-2010, 11:14 PM   #1119
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Re: Canadian Online Poker Tax Thread

My exact sentiments and concerns.
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Old 03-07-2010, 02:32 AM   #1120
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Re: Canadian Online Poker Tax Thread

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Originally Posted by ebffs View Post
I'm thinking about all this the same as you. I'm in my 2nd year now full time. I don't know if I'll keep doing this (I just got a degree 18 months ago and taking some time off), so I don't really want to pay tax for my first year.

But if I continue for 5 years, I prob will. Forget about risking the consequences. I want to use the roads, I use public health care, I call the police if my car is stolen....ect...ect. I want to be able to look my fellow Canadians in the eye and have some self respect. Not just leach off of society.
The key here is "reasonable expectation of profit." Your poker income, should you choose to declare it for tax purposes, would fall under business income in your T1 form. So like any other business that you would own, should you have losses in a certain year, you can deduct these losses form other income you made that same year or carry it back 3 years, forward 7 (or 20, not sure) years.

if I were your average canadian citizen and I hear that someone is getting tax rebates on gambling losses, even if they've already paid taxes on gambling gains in the past, I would it find proposterous. it would create a public outcry. this is why poker income in australia and britain is not taxed. politicians don't want to deal with cases of compulsive gamblers claiming to have a reasonable expectation of profit and deducting their losses from other income. and i think this is also why the cra has yet to seriously pursue the income of poker players.

if we were to talk about self respect the way you describe it, then you shouldn't even be playing poker. you're basically saying that you're the robin hood of poker, taking the money of the rich flounderers and giving it back to the poor canadian tax payer. but in reality the majority is not rich, some are skipping rent payments, others are getting into credit debt just so that they would piss away this money online.

i'm not saying you shouldn't pay taxes, just don't do it for emotional reasons. and if you really want to contribute to society, then pick a trade that would benefit people. become a lawyer, doctor, clerk or whatever... even a telemarkter has more value than a poker player.
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Old 03-07-2010, 02:57 AM   #1121
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Re: Canadian Online Poker Tax Thread

It would be next to impossible to deduct losses without first having claimed winnings. Also, even if you claimed winnings for years they would be pretty quick to shut you down should you have a multi-year losing streak.
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Old 03-07-2010, 03:20 AM   #1122
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Re: Canadian Online Poker Tax Thread

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if we were to talk about self respect the way you describe it, then you shouldn't even be playing poker. you're basically saying that you're the robin hood of poker, taking the money of the rich flounderers and giving it back to the poor canadian tax payer. but in reality the majority is not rich, some are skipping rent payments, others are getting into credit debt just so that they would piss away this money online.

i'm not saying you shouldn't pay taxes, just don't do it for emotional reasons. and if you really want to contribute to society, then pick a trade that would benefit people. become a lawyer, doctor, clerk or whatever... even a telemarkter has more value than a poker player.
Now this is just opening up a whole new can of worms here and I'm not going to derail this great thread. So this will be my only comment on this. Silly movies pull in tens of millions every week. We pump millions into olympic games. People spend more than they can afford for seats to the hockey game/football game, ect, ect. Entertainment and culture in general has massive value in society. Sure we could all just be manufacturers, lawyers, doctors, but where is the culture? Culture is who we are and why we live.

Poker is a form of entertainment. Poker often has higher TV ratings than NBA or NASCAR. Poker is an intellectual sport and is far more complicated than chess. Poker is part of human culture. Professional poker players contribute to human culture.

Also your generalization about people going into debt and missing rent to play is simply incorrect. This has been talked about ad nauseam. Studies have been done and statistics show that only a small percentage of poker players are "problem gambler" and only like 1% or something are "gambling addicts." Leading cause of death in America is heart disease from overeating, but nobody feels unethical for being a cook.
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Old 03-07-2010, 09:00 AM   #1123
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Re: Canadian Online Poker Tax Thread

From the NVG thread:

Quote:
Originally Posted by 27AllIn View Post
what's the punishment after getting audited when you decide not to declare your poker winnings?
Subsection 161(11) (interest)
Where a taxpayer is required to pay a penalty, the taxpayer shall pay the penalty to the Receiver General together with interest thereon at the prescribed rate computed,
(a) in the case of a penalty payable under section 162, 163 or 235, from the day on or before which
(i) the taxpayer’s return of income for a taxation year in respect of which the penalty is payable was required to be filed, or would have been required to be filed if tax under this Part were payable by the taxpayer for the year, or
(ii) the information return, return, ownership certificate or other document in respect of which the penalty is payable was required to be made, as the case may be, to the day of payment;

Subsection 163(2) (gross negligence penalty)
(2) Every person who, knowingly, or under circumstances amounting to gross negligence, has made or has participated in, assented to or acquiesced in the making of, a false statement or omission in a return, form, certificate, statement or answer (in this section referred to as a “return”) filed or made in respect of a taxation year for the purposes of this Act, is liable to a penalty of the greater of $100 and 50% of the total of
(a) the amount, if any, by which
(i) the amount, if any, by which
(A) the tax for the year that would be payable by the person under this Act
exceeds
(B) the amounts that would be deemed by subsections 120(2) and (2.2) to have been paid on account of the person’s tax for the year if the person’s taxable income for the year were computed by adding to the taxable income reported by the person in the person’s return for the year that portion of the person’s understatement of income for the year that is reasonably attributable to the false statement or omission and if the person’s tax payable for the year were computed by subtracting from the deductions from the tax otherwise payable by the person for the year such portion of any such deduction as may reasonably be attributable to the false statement or omission exceeds
(ii) the amount, if any, by which
(A) the tax for the year that would have been payable by the person under this Act
exceeds
(B) the amounts that would be deemed by subsections 120(2) and (2.2) to have been paid on account of the person’s tax for the year had the person’s tax payable for the year been assessed on the basis of the information provided in the person’s return for the year,
[…]
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Old 03-08-2010, 01:47 AM   #1124
banalanal
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Re: Canadian Online Poker Tax Thread

I've read about 75% of this thread. Few oustanding thoughts.

1.How can pleading ignorance be a reasonable defence when we are obviously playing longterm with an expectation of profit? As I understand it, the CRA doesn't care if you are a teacher or a poker player, if your lifestyle exceeds your reported income, you owe them money.

2.(Off topic but saw it in this thread)Would love a few more thoughts on the topic of owning Cdn realestate as an unattractive option (few hundred posts ago). I'm hoping to buy a few homes over the next few years, and as long as the rents equal the mortgage payments, you have a house paid off in 20 years, and after that the monthly rent going to your pocket (after expenses). How can that be a bad deal?

3.There really has been little talk of the benefit and details as incorporating as a poker player. I'd really like to hear more. So you could get your taxes on the bulk of the money down to 18% and then you pay your provincial rate on your living amounts? For buying a home you could borrow from the company if an interest is paid? If a person chooses to pay taxes, is that the best way to go?

Any more thoughts on those topics would be greatly appreciated. Thanks.
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Old 03-08-2010, 03:16 AM   #1125
Henry17
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Re: Canadian Online Poker Tax Thread

1) It is because CRA while part of the better educated and harder working public service is still part of the public service which is nothing more than a make work project for French people who couldn't make it at McDonalds. Unless you do something really stupid to draw attention to you or someone rats you out they tend to just leave you lone. I do expect that in the next few years online poker will get hit with its own project xenon type endeavor and that most serious players will get caught in that but till then I wouldn't worry about it.

2) It is because in most provinces the landlord / renter legislation gives way too much power to renters. Further, th ability to borrow on property that is not going to be owner occupied is limited. I think the legislative maximum is 80% LTV but realistically a major bank will not allow you to exceed 65% LTV for a rental property. Factor in higher property taxes and a rent to property value ratio that isn't very favorable and it is just a bad idea. In the States it is completely different and a great way to make money but in Canada while you can make money it is hard and there are so many better options.

3) If you claim your poker income as business income you have to pay both sides of CPP which adds 9.8% to tax bill on the first $X of income. You don't pay that on dividend income. You actually pay no tax on $48-60k of dividend income so the corporate rate would be the only tax you pay on that. There is more but I have to run so someone else can get into it/
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