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Old 11-10-2010, 09:48 PM   #1426
tiltymcfish0
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Re: Canadian Online Poker Tax Thread

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Originally Posted by ebffs View Post

It's simple, keep your money under a mattress, don't acquire assets. Just spend it all on blow and hookers. Besides your neighbors won't mind paying for your roads and medical bills.....but by all means avoid paying taxes AT ALL COSTS!!!!
Sure, but I think you just plagiarized that book "Gambling For a Living"
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Old 11-10-2010, 11:18 PM   #1427
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Re: Canadian Online Poker Tax Thread

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Sure, but I think you just plagiarized that book "Gambling For a Living"
Not sure if you're joking or what this means. Haven't read that book.
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Old 11-13-2010, 12:28 PM   #1428
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Re: Canadian Online Poker Tax Thread

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Not sure if you're joking or what this means. Haven't read that book.
Oh. You were serious, okay. No, you didn't actually plagiarize.

Enjoy the hookers and blow.
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Old 11-13-2010, 12:57 PM   #1429
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Re: Canadian Online Poker Tax Thread

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Oh. You were serious, okay. No, you didn't actually plagiarize.

Enjoy the hookers and blow.
Sir, you have a profound sense of sarcasm. Hookers/blow is obviously the proverbial cliche frivolous cash wasting. If that's the part that was in your book I assure you it's not the first place it's appeared......again are you serious?
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Old 11-17-2010, 02:41 AM   #1430
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Re: Canadian Online Poker Tax Thread

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Purposely organizing your transactions in order to avoid reporting requirements or any other law (with no other purpose than to avoid the reporting laws) is illegal.


2. Your bank reports you as engaging in suspicious activity. Banks have a know your client rule. If what you do at the bank is not typical to what they know about you, they are supposed to report you.
Nothing illegal about depositing a lot of $20 bills every day, but if you're not a known store owner you will likely get reported. Nothing illegal about getting wires from Nigeria but if the bank doesn't know you are a business with customers there, you will get reported. Both are known flags.
If they have reason to suspect you are purposely sending/getting money regularly that is just under 10k and they don't know why, they will eventually report you. The reporting of transfers is not done at the branch level but at corporate by the compliance people.
Maybe this is a stupid question, but any time I get questioned by a bank teller regarding the source of my rather sporadic poker cheques, I just straight out tell them its from online poker. While you mentioned that the reporting is done at the corporate level and not the branch level, does this mean that what I mentioned just now is a complete moot point?
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Old 11-17-2010, 08:46 PM   #1431
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Re: Canadian Online Poker Tax Thread

So I've skimmed through the last 15 pages over the last few hours but either missed it or it wasn't asked.

Lets say that one made 20k in a year playing poker as a hobby, put into their bank account, but lost 10K playing poker live in casinos.... how could they prove that they
a) lost the money in the casino and
b) lost the money playing poker (obv, losing the money playing some house games wouldn't count towards wins/losses as far as taxes are concerned)

Basically, you've made only 10K in poker but it would appear in an audit like you've made 20K.
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Old 11-17-2010, 08:49 PM   #1432
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Re: Canadian Online Poker Tax Thread

It would be a matter of credibility for the judge to assess, not unlike how facts are determined in many legal contexts.
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Old 11-17-2010, 09:02 PM   #1433
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Re: Canadian Online Poker Tax Thread

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It would be a matter of credibility for the judge to assess, not unlike how facts are determined in many legal contexts.
So if CRA doesn't believe me, then I have to threaten them that I'll go to court? And if they oblige, how much will going to court cost me?
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Old 11-17-2010, 10:01 PM   #1434
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Re: Canadian Online Poker Tax Thread

I have been playing online for a year now. Before I would squiril away money into multiple bank accounts in small cash deposit amounts, and keep a lot in my casino account. This was always sparatic and was never more then 5k at a time.

When I won miniFtops I had to figure out a way to get $65,000 off FT.

I spoke to 2 friends at two different banks. Both said the same thing. Any electronic transfers, they don't watch, nor care about. They are only required to report transactions over 10K CASH. So if you won a big tourney, and decided to deposit more then 10K CASH, you will get reported. If you do 9K, it is up to the teller to decide if they care to report it. Sometimes, depending on the teller, if their one of those brown nosing tattle tale people, they will go to their manager and may report it to get a pat on the back because they think your trying to dodge their 10K number. This is rare but can happen.

SO if your taking money offline, get a "pro gamblers" account thru Moneybookers that allows you to take out unlimited amounts. You will have to e-mail them to set it up. Once that is done, just ship money to your bank account. I did 3 wires for $20,000 and had no problems. I filed my taxes a few months later, and had no problems.

You will never have problems with the government until your life style changes. Most of you are 20 somethings with no big purchases in mind anytime soon. Here is where CRA will come knocking. When you buy a new car, or a property. CRA has reg flags in place with Canadas MT (Ministry of Transportation). If you buy a car, and pay xxxx tax, and declared 0 income, you will be flagged. If you pay property tax to the gov, and pay no tax, you will get flagged. If you rent an apartment, bought used car, and are careful with cash deposits, you will not be flagged and not have to pay taxes anytime soon.

One day, when you have enough money to buy a house, be prepared to have records for the past few years, about a tourney "score" and it will be up to a judge to decide if your going to pay taxes or not, mainly if the CRA can prove you run your poker like a business and you will consistantly win. If you can convince the judge you got lucky a few times, and show some "evidence" you will be ok. As far as I know, the only people that pay taxes are big name famous live pros. So until to make the limelight, or have enough to buy a house, you will be fine.
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Old 11-17-2010, 10:46 PM   #1435
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Re: Canadian Online Poker Tax Thread

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So if CRA doesn't believe me, then I have to threaten them that I'll go to court? And if they oblige, how much will going to court cost me?
It all depends on your case. In the Tax Court of Canada under the informal procedure many taxpayers are self-represented (though I'm not certain this is the best choice for many of them; lawyers can be quite +ev).

The best thing to do is to keep a journal of your play with detailed notes in order to document everything you've done. That way you'll be much more confident of your numbers, and the CRA will be more apt to accept your assertions as true. If you have a frequent player pass at the casino, you might be able to access some other records to substantiate your play.
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Old 11-17-2010, 11:51 PM   #1436
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Re: Canadian Online Poker Tax Thread

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Originally Posted by TaxGuru View Post
It all depends on your case. In the Tax Court of Canada under the informal procedure many taxpayers are self-represented (though I'm not certain this is the best choice for many of them; lawyers can be quite +ev).

The best thing to do is to keep a journal of your play with detailed notes in order to document everything you've done. That way you'll be much more confident of your numbers, and the CRA will be more apt to accept your assertions as true. If you have a frequent player pass at the casino, you might be able to access some other records to substantiate your play.
Thanks TG, this is good advice. I've only played live a few times but was planning on doing it more. I'm in my first year of poker and am up 10K so who knows what will happen next year. Just trying to prepare myself. I already work FT for 60K+ so who knows, maybe I'll be leaving the poker off the books anyway.
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Old 11-18-2010, 01:01 AM   #1437
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Re: Canadian Online Poker Tax Thread

When holding a mortgage inside of an RRSP is their a limit other than the usury limit on what you can charge yourself with respect to interest?
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Old 11-18-2010, 08:23 AM   #1438
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Re: Canadian Online Poker Tax Thread

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When holding a mortgage inside of an RRSP is their a limit other than the usury limit on what you can charge yourself with respect to interest?
Yes, the limit is a fair market interest rate on your mortgage. You and the trust that is your RRSP do not act at arm's length. Thus, para. 69(1)(a) applies:

"69. (1) Except as expressly otherwise provided in this Act,
(a) where a taxpayer has acquired anything from a person with whom the taxpayer was not dealing at arm’s length at an amount in excess of the fair market value thereof at the time the taxpayer so acquired it, the taxpayer shall be deemed to have acquired it at that fair market value;"
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Old 11-18-2010, 08:25 AM   #1439
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Re: Canadian Online Poker Tax Thread

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Yes, the limit is a fair market interest rate on your mortgage. You and the trust that is your RRSP do not act at arm's length. Thus, para. 69(1)(a) applies:

"69. (1) Except as expressly otherwise provided in this Act,
(a) where a taxpayer has acquired anything from a person with whom the taxpayer was not dealing at arm’s length at an amount in excess of the fair market value thereof at the time the taxpayer so acquired it, the taxpayer shall be deemed to have acquired it at that fair market value;"
I should add that one could quibble about the precise consequences of this provision, but in my view it addresses the point. Other provisions to consider would include 67 (on "reasonableness" generally) and 245 (the GAAR). There may be others, too.
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Old 11-19-2010, 10:21 AM   #1440
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Re: Canadian Online Poker Tax Thread

Don't forget that you are required to have mortgage default insurance
on a mortgage you hold in your RRSP. There are also annual fees.

The interest rate limit usually is considered the highest published rate you can find at the time.
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Old 11-19-2010, 10:28 AM   #1441
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Re: Canadian Online Poker Tax Thread

I had a long drive and had a stupid idea of a way to avoid taxes using this but it only made sense because I was exhausted.
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Old 11-24-2010, 02:03 PM   #1442
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Re: Canadian Online Poker Tax Thread

Regarding the WSOP it's been reported that while the "professional" Duhamel will have to pay both Cdn and US taxes, Jarvis will only have to pay the IRS witholding because he's supposedly an "amateur":

http://www.taxabletalk.com/2010/11/0...of-poker-2010/

I don't know if that is true but this is a debate we need to have in this country. "Amateurs" have won the WSOP before - what if the finishing places of the two Cdns had been reversed? Would anyone then think it fair that the "professional" pays taxes on $1M in winnings while the "amateur" gets off scott-free (at least in this country) on $9M?

Rupert
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Old 11-24-2010, 02:16 PM   #1443
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Re: Canadian Online Poker Tax Thread

Yes. Winning WSOP in no way qualifies you as a professional. The test for if you are a professional is based on a set of criteria that have zero to do with the amount of money you win at one tournament.
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Old 11-24-2010, 04:04 PM   #1444
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Re: Canadian Online Poker Tax Thread

I'm sure the sponsorship deal with PS will more than make up for the tax he pays due to being a "Team Pro."
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Old 11-24-2010, 04:17 PM   #1445
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Re: Canadian Online Poker Tax Thread

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I'm sure the sponsorship deal with PS will more than make up for the tax he pays due to being a "Team Pro."
Not even close. I highly doubt Stars is paying people $8.7M a year for sponsorship.

I didn't really follow the WSOP but if I'm not mistaken there was something like a six month break between the tournament and the final table. Assuming that is correct the second I made the final table I'd have severed residency and moved to a place where poker is not taxable. Win the tournament then move back to Canada after NYE.
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Old 11-24-2010, 04:32 PM   #1446
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Re: Canadian Online Poker Tax Thread

It's not trivial to shake Canadian residence, particularly if you try to reestablish it shortly thereafter.

Changing provincial residence, on the other hand, is much easier.
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Old 11-24-2010, 04:38 PM   #1447
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Re: Canadian Online Poker Tax Thread

Duhamel should move to Alberta, which has a top provincial tax rate of 10%. If he's resident there on December 31, 2010, that will count for the entire 2010 tax year (subject to some caveats). That way he can save more than 9% of tax on most of the winnings. As a quick and dirty estimate, that's something like $800,000.

Jonathan, consider this a freebie.
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Old 11-24-2010, 04:45 PM   #1448
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Re: Canadian Online Poker Tax Thread

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Not even close. I highly doubt Stars is paying people $8.7M a year for sponsorship.

I didn't really follow the WSOP but if I'm not mistaken there was something like a six month break between the tournament and the final table. Assuming that is correct the second I made the final table I'd have severed residency and moved to a place where poker is not taxable. Win the tournament then move back to Canada after NYE.
8.7M/year? He doesn't pay 8.7M in tax. I'm guessing the tax is around 1.7M. Now for the rest of his life he's on a complete freeroll for all live events, including buy-ins and travel expenses and gets to keep 100% of his cash-outs. I think he also gets to play rake free on Stars and probably gets cash for endorsements ect. Depending on the notoriety of the pro the cash part of the sponsorship can also be substantial. I've heard Tom Dwan gets over 2M/year from Full Tilt. But just look at Chris Moneymaker. He's really an unremarkable poker player, yet, he's still living the life flying around the world playing the live circuit 8 years later. If I won 8.7M main even I'd gladly forfeit 2M of it to be a PS Team Pro. Not only does that make you completely on the up and up with the CRA but if your confident you'll be devoting yourself to poker for decades to come it will even out soon enough and eventually become a profitable investment.
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Old 11-24-2010, 04:54 PM   #1449
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Re: Canadian Online Poker Tax Thread

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8.7M/year? He doesn't pay 8.7M in tax.
He pays $4.275M in tax because he is in QC. If he moved to Alberta as TaxGuru suggested it would only be $3.2M saving himself $1M.

To replace $4.275M he would need a sponsorship deal of $8.25M because he would be taxed on the sponsorship as well.
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Old 11-24-2010, 04:58 PM   #1450
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Re: Canadian Online Poker Tax Thread

Just a quick tip, MoneyMart(c) is off the Government radar.
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