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Old 03-25-2010, 02:24 PM   #1176
Henry17
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Lefort View Post
I mean there's also the moral aspect of it. I have plenty of friends making 10% of my income and they pay taxes on that. Yet I reap the same benefits as they do from government spending. That's not easy to swallow or feel proud about.
I actually have no issues with this. I don't want to turn this into a politics topic but tax money is grossly misspent. If you live in Ottawa you'd see how much is blown on the public service. You could get more done with 10% of the people. You have scandal after scandal where millions are just syphoned away. Add to that supporting whinny Quebec and a health care system that is useless -- I'm not sure exactly what value I'd get for paying taxes.
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Old 03-25-2010, 03:55 PM   #1177
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Re: Canadian Online Poker Tax Thread

ebffs: I get the feeling that that's precisely why the CRA has avoided the issue, if nothing other than it just being small potatoes for them. But I think the important thing is that they don't have a clear play on the topic, so even once it does become an "issue" for them, I'm guessing it will take a great deal of time before they figure out just exactly what they want to do and then implement it... which helps our push for playing without paying. But that's most likely just wishful thinking.. =/
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Old 03-25-2010, 03:58 PM   #1178
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Re: Canadian Online Poker Tax Thread

I'm still waiting for a player who has been paying to contact me with a file to filing amended returns reporting "nil" rather than their winnings to see if they can secure a refund. This might force the courts to clarify their views. Based on Leblanc, it could very well be good news. The challenger would get a very nice refund (with interest) if they succeed.
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Old 03-25-2010, 04:00 PM   #1179
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Re: Canadian Online Poker Tax Thread

Henry17: Your argument about misspending is a good one. But it doesn't completely nullify my ill-feeling about not paying anything at all when my peers who make considerably less, do.

Your argument basically is saying, because the government is completely inefficient with tax spending, the $70k poker player X doesn't pay them is really only "snuffing" his friends of the ~$10k it actually would have produced in the end after inefficient usage. Which I guess ultimately makes me feel a little better about it, but not altogether off the hook (morally).

I think what it truly comes down to from a moral standpoint is, (all joking aside), WWJD? And we can simply replace J with those of our peers that we have the utmost respect for. I actually plan on asking a lot of my non-poker playing friends what they think about it over the next couple weeks, and what they would do in the same situation (after considering both the moral and financial/risk aspects of it).
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Old 03-25-2010, 06:52 PM   #1180
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Re: Canadian Online Poker Tax Thread

If you are thinking of not paying then telling a bunch of your friends that this is the case is a terrible idea. Almost all tax evasion cases get brought to the attention of CRA by friends/family/neighbors.
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Old 03-25-2010, 07:44 PM   #1181
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Re: Canadian Online Poker Tax Thread

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I had a question also. When you say loses can be deducted in a subsequent losing year, can they only be deducted vs. future winnings in the next year? I mean otherwise say I got back to Chemistry in 2011 and make 90,000 for the year. I could throw 30,000 on Full Tilt and hit the 50/100 tables just for a shot. If I run bad and blow through 30k, just write it off and only get taxed on 60k income......seems too good to be true. It's like a 10k incentive to take a high stakes shot.

Also I can see serious money laundering issues with less honest poker players if the CRA started getting aggressive. I mean offshore gaming sites are perfect for this. On almost all poker sites you can transfer 100's of thousands to other players via inter-account transfer almost instantly. This is constantly happening anyway with online prop bets and certain players are holding on to 100k in wagers (like in H2T's recent 125k bet for his NL200 winnings). So if someone really wanted to f$* with the CRA they could claim a 30k year, which would be pretty much tax free anyway. Then the next year transfer 100k to someone you trust, that player could claim a windfall tourney win or something (choose someone who doesn't play) and you could claim a loss and carry it forward for the next year even though you actually gained 100k......I mean that's just one idea, but the CRA could have a number of problems treating poker players unfairly like this.
Losses can be carried back to get a refund of taxes paid in prior years. To
be able to do this, then of course you would have had to already have paid taxes on it. To carry it forward, then you would have to declare income at some point to make use of it, so CRA doesn't lose.

Manipulating losses isn't new or something applicable to only poker. Businesses to this all the time and CRA is ok at catching this.
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Old 03-25-2010, 08:07 PM   #1182
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Lefort View Post
ebffs: I get the feeling that that's precisely why the CRA has avoided the issue, if nothing other than it just being small potatoes for them. But I think the important thing is that they don't have a clear play on the topic, so even once it does become an "issue" for them, I'm guessing it will take a great deal of time before they figure out just exactly what they want to do and then implement it... which helps our push for playing without paying. But that's most likely just wishful thinking.. =/
CRA's play is to:
1. Go after a few high profile players
2. Publicize that losses can be deducted up to the amount of prior income declared and that pros are taxable (and exacatly what a pro is).
3. Deny all losses automatically if there are no prior wins reported.
4. Hire a dozen people to collect data from the B&M casinos and online sites as to who is winning big and target the big name, regular winners.
5. Push for licensing of sites so that you can get 10% withholding on all withdrawals.
6. Watch tax revenue pour in.
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Old 03-27-2010, 05:46 AM   #1183
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Re: Canadian Online Poker Tax Thread

[QUOTE=Lefort;17734175
I mean there's also the moral aspect of it. I have plenty of friends making 10% of my income and they pay taxes on that. Yet I reap the same benefits as they do from government spending. That's not easy to swallow or feel proud about. [/QUOTE]

im not really too concerned about this. i probably pay as much in gst/pst or whatever every year as average joe making 50k year does in income tax.
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Old 03-30-2010, 02:22 PM   #1184
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Re: Canadian Online Poker Tax Thread

I am new to Canada, and I have a question about filing taxes as an online poker player. Basically, I see two possibilities. I can either declare myself self-employed, which would provide me with RRSP contribution room and would also allow me to deduct some expenses, but would also make filing more complex and would require me to pay about 10% of my income to the Canadian Pension Plan, or I can just file it as "other income" (line 130 on the tax return), in which case none of the above applies. I have not analyzed this in detail, but at a quick glance the necessity to give away the extra 10% easily outweighs all of the benefits. So, what I am wondering about is:

1) Would I be violating any Canadian laws/rules/etc by filing it as "other income"?
2) Do you think my analysis makes sense financially? Is there anything I am overlooking?
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Old 03-30-2010, 02:26 PM   #1185
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Re: Canadian Online Poker Tax Thread

Legally, in my view it is not "other income" within the meaning of the Act, unless you want to try to shoe-horn it into 56(1)(n) (but I don't think this works).
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Old 03-30-2010, 03:36 PM   #1186
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Re: Canadian Online Poker Tax Thread

Re: poker as a business

I think this has been linked to before.
It's not law but is a CRA bulletin:
http://www.cra-arc.gc.ca/E/pub/tp/it334r2/it334r2-e.txt

Items 10 and 11 seem clear.
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Old 03-30-2010, 03:43 PM   #1187
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Re: Canadian Online Poker Tax Thread

btw anybody looking for free Cdn tax-return software check out StudioTax.
I've used it for 3 years and about 40 returns making small voluntary donations twice.

Here is a list of CRA certified tax-prep. software.
http://www.netfile.gc.ca/sftwr-eng.html
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Old 03-30-2010, 04:28 PM   #1188
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Re: Canadian Online Poker Tax Thread

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Originally Posted by TaxGuru View Post
Legally, in my view it is not "other income" within the meaning of the Act, unless you want to try to shoe-horn it into 56(1)(n) (but I don't think this works).
I am not at all familiar with the Canadian tax legislation. Which Act are you referring to? Does it have the definition of "other income"?

I filed it last year (2008) as "other income" with explanation "poker winnings" for the few months that I spent in Canada after becoming permanent resident. No one from the revenue agency informed me that this was wrong. If it was in fact wrong, can I still refile?

Also, I was contributing to RRSP during 2009, assuming that I have the usual 18% limit based on "other income". Now it turns out that I don't get any contribution room from that, so unless I can refile my 2008 tax return, I guess I'll have to withdraw that money and pay the penalty (1% per month or whatever it is).
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Old 03-30-2010, 09:07 PM   #1189
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Re: Canadian Online Poker Tax Thread

RRSP contributions can be carried over and deducted from future employment income.
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Old 04-01-2010, 12:06 AM   #1190
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Re: Canadian Online Poker Tax Thread

off topic, but what is everyone doing with their USD now that exchange rate is so bad?
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Old 04-01-2010, 06:20 AM   #1191
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Re: Canadian Online Poker Tax Thread

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Originally Posted by helen_gamble View Post
I am not at all familiar with the Canadian tax legislation. Which Act are you referring to? Does it have the definition of "other income"?

I filed it last year (2008) as "other income" with explanation "poker winnings" for the few months that I spent in Canada after becoming permanent resident. No one from the revenue agency informed me that this was wrong. If it was in fact wrong, can I still refile?

Also, I was contributing to RRSP during 2009, assuming that I have the usual 18% limit based on "other income". Now it turns out that I don't get any contribution room from that, so unless I can refile my 2008 tax return, I guess I'll have to withdraw that money and pay the penalty (1% per month or whatever it is).
You only get contribution room from "earned income." This is generally salary, wages, and business income. It would not include other kinds of income.

Subdivision d
Other Sources of Income

Amounts to be included in income for year
56. (1) Without restricting the generality of section 3, there shall be included in computing the income of a taxpayer for a taxation year,

[...]

Scholarships, bursaries, etc.
(n) the amount, if any, by which

(i) the total of all amounts (other than amounts described in paragraph 56(1)(q), amounts received in the course of business, and amounts received in respect of, in the course of or by virtue of an office or employment) received by the taxpayer in the year, each of which is an amount received by the taxpayer as or on account of a scholarship, fellowship or bursary, or a prize for achievement in a field of endeavour ordinarily carried on by the taxpayer, other than a prescribed prize, [...]
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Old 04-01-2010, 11:01 AM   #1192
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Re: Canadian Online Poker Tax Thread

Anybody see the W5 piece on the Canada Revenue audit process? It's difficult to see what the truth is, but apparently they are pretty ruthless. One of the former agents they interviewed was saying things like, 'we will break you'.

edit: apparently it airs on Saturday.

Last edited by Absolution; 04-01-2010 at 11:07 AM.
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Old 04-01-2010, 02:38 PM   #1193
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Re: Canadian Online Poker Tax Thread

Auditors are evaluated on what they recover and what their hourly is, much like poker.
They may settle on getting you for something small if they can do it without a fight rather than challenge you on something big that they may lose on.

If you are prepared and honest then you are fine even if you vehemently
disagree with them on something.
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Old 04-04-2010, 05:14 PM   #1194
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Re: Canadian Online Poker Tax Thread

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Auditors are evaluated on what they recover and what their hourly is, much like poker.
They may settle on getting you for something small if they can do it without a fight rather than challenge you on something big that they may lose on.
I went through one of their audits (business - non poker related) about a dozen years ago. They wanted 8k and while I was going through the appeal process they, without any warning, sent a collection agency after me. I got pretty upset with them - they didn't have any right to try and force me to pay until the appeal was complete. Worst they could legally do was collect interest if I ultimately lost. At the time I was told that at each level of appeal the individual involved has a higher rate/hour to maintain than the previous individual. Which would lead one to believe that your chances of succeeding should increase as the appeal process progresses.

FWIW my accountant wrote a letter making it clear he was willing to go to tax court and they fairly quickly came around to see things my way.
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Old 04-05-2010, 02:55 PM   #1195
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Absolution View Post
Anybody see the W5 piece on the Canada Revenue audit process? It's difficult to see what the truth is, but apparently they are pretty ruthless. One of the former agents they interviewed was saying things like, 'we will break you'.

edit: apparently it airs on Saturday.
Here it is:

http://www.ctv.ca/servlet/ArticleNew...0403?s_name=W5
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Old 04-05-2010, 04:51 PM   #1196
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Re: Canadian Online Poker Tax Thread

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off topic, but what is everyone doing with their USD now that exchange rate is so bad?
get a usd account and get your financial adviser to invest you in some US stocks
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Old 04-05-2010, 06:05 PM   #1197
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Re: Canadian Online Poker Tax Thread

TorontoCFE are you saying we shouldn't be claiming winnings under "Other income" assuming we are not filing as a professional? If not what should I be putting winnings under?
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Old 04-05-2010, 06:06 PM   #1198
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Re: Canadian Online Poker Tax Thread

Nothing. It is either business income or it doesn't get reported at all.
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Old 04-06-2010, 07:53 AM   #1199
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Re: Canadian Online Poker Tax Thread

If you aren't in the business of poker, then you aren't taxable.
It can be business income or maybe self-employment income but that is it.
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Old 04-06-2010, 03:38 PM   #1200
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Re: Canadian Online Poker Tax Thread

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get a usd account and get your financial adviser to invest you in some US stocks
yah ive been doing that, but im not totally thrilled about putting a ton of money into us stocks (although we have bought a bit.)

i was thinking about buying up some california real estate, but im not so sure how to do that without buying properties outright with no mortgage.
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