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Old 11-24-2010, 05:09 PM   #1451
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Re: Canadian Online Poker Tax Thread

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Originally Posted by TaxGuru View Post
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.
Not reestablishing it wouldn't be that big of a deal I imagine. To keep $4M I think most people would happily spend a few years living in the UK or Caribbean and just visiting family. If he is going to be getting what I assume is $200-300k in sponsorship plus having all his future winnings taxed I'd say it is time to go.
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Old 11-24-2010, 05:20 PM   #1452
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Re: Canadian Online Poker Tax Thread

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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.
Ok, but you said 8.7M/year. Most people don't retire until they're 65 and poker players can go much longer than that. By embracing the "Pro" status and accepting a sponsorship deal, he'll eventually be freerolling on all the tax he gave up. Plus he doesn't have to run off to some foreign country. He can stay with his family and friends like a man and live with pride. That alone is priceless to most people with or without the sponsorship which will net him millions in the years to come anyway.
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Old 11-24-2010, 05:36 PM   #1453
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Re: Canadian Online Poker Tax Thread

Stars will never give him enough money to cover his taxes.

Canada is a pretty horrible country. The second I have to pay taxes I'm gone. I can still spend almost six months here and I can spend the rest on some beach.
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Old 11-24-2010, 06:00 PM   #1454
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Re: Canadian Online Poker Tax Thread

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Stars will never give him enough money to cover his taxes.

Canada is a pretty horrible country. The second I have to pay taxes I'm gone. I can still spend almost six months here and I can spend the rest on some beach.
I personally would do the same. I'm not really attached to one particular place. I've moved around my whole life. But for some people it's different. Their home is their life. You can't just say Stars will never give him enough so he'll eventually break even on the tax he paid on his ME win to be a "Pro." You don't know this as a fact. Forget about how much he can win freerolling all these big live events, but the endorsement cash alone can be in the millions annually depending on his performance.

You can say something like "Based on what I know about his game, I don't think he'll stay in the industry long enough or maintain a winning record long enough to warrant enough cash from his Pro deal with Stars"...you know something like that. But you can't just flat out say he won't get paid enough period...you don't know that. This is all I'm saying.
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Old 11-24-2010, 06:24 PM   #1455
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Re: Canadian Online Poker Tax Thread

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You can say something like "Based on what I know about his game, I don't think he'll stay in the industry long enough or maintain a winning record long enough to warrant enough cash from his Pro deal with Stars"...you know something like that. But you can't just flat out say he won't get paid enough period...you don't know that. This is all I'm saying.
Pro deals are not for life. He has to continue to be a presence in the poker community to keep getting money from Stars -- that means he has to keep playing and presumably winning. He will continue to pay income tax on his winnings so even if he recovers the $4M he'll pay out this year over the next 10-15 years he'll have paid CRA a bunch more. Given he is being taxed on the sponsorship money and he has to keep winning to be a pro it is mathematically impossible to ever get enough from Stars to cover the tax bill. Obviously there isn't a choice but given the hypothetical of no tax and no sponsorship vs sponsorship and tax it is better to take no tax no sponsorship unless you are offered a sponsorship deal that is > your winnings.

Last edited by Henry17; 11-24-2010 at 06:31 PM.
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Old 11-24-2010, 06:43 PM   #1456
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Re: Canadian Online Poker Tax Thread

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Pro deals are not for life. He has to continue to be a presence in the poker community to keep getting money from Stars -- that means he has to keep playing and presumably winning. He will continue to pay income tax on his winnings so even if he recovers the $4M he'll pay out this year over the next 10-15 years he'll have paid CRA a bunch more. Given he is being taxed on the sponsorship money and he has to keep winning to be a pro it is mathematically impossible to ever get enough from Stars to cover the tax bill. Obviously there isn't a choice but given the hypothetical of no tax and no sponsorship vs sponsorship and tax it is better to take no tax no sponsorship unless you are offered a sponsorship deal that is 3X your winnings.
(1) Part in bold is just plain ridiculous. Even if he sucked and stuck at 200k/year from his sponsorship deal, he'd make back the tax from his ME win in around 20 years. It might be longer or even much shorter depending on his deal but how is that "mathematically impossible." Instead of just trying to get the last word with absurd claims and arbitrary estimates, why don't you post a mathematical proof based on the exact amount of tax he'll pay for his ME win and the exact % of tax he'll pay on his yearly sponsorship cash assuming 200k/year.

(2) There was sort of a choice. He could have refused a sponsorship and claimed he was an amateur and it would have been difficult for CRA to prove otherwise.

(3) Why the hell wouldn't he "continue to be a presence in the poker community" Seems like a pretty good full time job to me. Sure beats working in the factory. I doubt he'll have much trouble staying motivated when he's free rolling the live circuit. Secondly I don't believe he has to be some amazing success to maintain his deal for decades. Take Chris Moneymaker as an example. So even the low end of how this can shake out would not make it "mathematically impossible" to at least break even on the tax. Now consider the upper end of the possibilities. Like he pours himself into it and keeps improving, wins millions more from the big events he'll be free rolling and keeps getting better sponsorship deals. His worst case scenarios are still pretty lucrative but his best case possibilities are so great it makes turning down a sponsorship deal and running off to another country a little cowardly.

When you throw in the fact that by paying taxes he's completely honest with the CRA, that's just pure gravy. He'll be an open voice for professional poker players in Canada and never has to leave his home. He can openly invest and buy property and live in the country he loves.
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Old 11-24-2010, 06:53 PM   #1457
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Re: Canadian Online Poker Tax Thread

This is getting boring but at $200k/year it would take 38 years not 20 to recover the WSOP taxes.

So at the end of 38 years he recovered the taxes from the ME but what about all the taxes on his winnings 2011+

Also I'm not implying that by turning down sponsorship he would avoid taxes because he wouldn't so the correct choice was to accept. That still doesn't mean he will ever get as much from Stars as he pays in taxes. Not even close.
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Old 11-24-2010, 07:45 PM   #1458
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Re: Canadian Online Poker Tax Thread

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This is getting boring but at $200k/year it would take 38 years not 20 to recover the WSOP taxes.

So at the end of 38 years he recovered the taxes from the ME but what about all the taxes on his winnings 2011+

Also I'm not implying that by turning down sponsorship he would avoid taxes because he wouldn't so the correct choice was to accept. That still doesn't mean he will ever get as much from Stars as he pays in taxes. Not even close.
You're saying it will take 38 years for him to cover his tax on the ME win NOT including tax on his actual sponsorship income. So, you're implying that he's going to pay 7.6 million tax on his ME win? This is getting boring. My 20 years was based on him paying around 30% tax on 200k/year sponsorship deal (forgetting the fact that this is an arbitrary estimate and has the potential to be magnitudes more). So 140k/year, 2.8M after 20 years. How is this not even close?

The math here is pretty simple and you've outright stated that it's "mathematically impossible". So why not just work it out in one post with the exact numbers for us less educated on exactly how tax works.

Thanks

P.S. I'd say if he turned down sponsorship he could have portrayed himself just like Darvin Moon did last year. Except in Canada Darvin Moon wouldn't pay tax. Who the hell knew who Duhamel was before this? A in between jobs factory worker who's been playing some tournaments lately and getting lucky. I think he'd have a good shot in court.


Edit: I see from googling it that Canada/Quebec combined will take 48% of $8,944,310. So the exact number is 4.29M. 4.29M/0.104 = 41 (based on 104k/year after 48% tax on 200K) So it would be 41 years assuming he could never get a better sponsorship deal and assuming he's only getting 200k now. Also assuming he NEVER wins a single dollar more from the live event circuit. Pretty far from "mathematically impossible" given his age and potential.

You're saying 38 years NOT including the tax he'll pay on his sponsorship income, which is clearly wrong...but maybe I'm missing something.

Last edited by ebffs; 11-24-2010 at 08:04 PM.
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Old 11-24-2010, 08:01 PM   #1459
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Re: Canadian Online Poker Tax Thread

henry's right, ebffs' wrong. don't argue

btw why would Duhamel pay taxes on his ME win in Canada? Aren't gambling winnings pretty much untaxable in Canada?
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Old 11-24-2010, 08:07 PM   #1460
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Re: Canadian Online Poker Tax Thread

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henry's right, ebffs' wrong. don't argue

btw why would Duhamel pay taxes on his ME win in Canada? Aren't gambling winnings pretty much untaxable in Canada?
This is ******ed on so many levels. I just established with with one line of grade 4 math that 38 years at 200k/year before tax is completely wrong. But Henry confidently stated it was "mathematically impossible."

Second if you don't understand why Duhamel now has to pay tax why don't you actually try reading this thread.
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Old 11-24-2010, 08:09 PM   #1461
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Re: Canadian Online Poker Tax Thread

why don't u try to verify your ****** assumptions?
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Old 11-24-2010, 08:15 PM   #1462
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Re: Canadian Online Poker Tax Thread

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why don't u try to verify your ****** assumptions?
Actually 48% is not an assumption, its a fact. Secondly the 200k is being very overly generous to Henry. I've just been reading more and Cada's deal for winning the main even last year was actually around 1 million. Which makes sense because I already knew Dwan is getting in excess of 2 million/year for his deal. If we work with these number instead of the 200k Henry came up with (and I used just to humour him)....well it makes his 38 years BEFORE additional tax even more ridiculous.
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Old 11-24-2010, 08:17 PM   #1463
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Re: Canadian Online Poker Tax Thread

you clearly suffer from either ADD, reading comprehension or hallucination
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Old 11-24-2010, 08:26 PM   #1464
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Re: Canadian Online Poker Tax Thread

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You're saying it will take 38 years for him to cover his tax on the ME win NOT including tax on his actual sponsorship income. So, you're implying that he's going to pay 7.6 million tax on his ME win?
No obviously to recover something means to end up back as before.

Quote:
So 140k/year, 2.8M after 20 years. How is this not even close?
Because as was already stated he owes $4.275M on the ME win. $2.8M is less than $4.275M

Quote:
P.S. I'd say if he turned down sponsorship he could have portrayed himself just like Darvin Moon did last year. Except in Canada Darvin Moon wouldn't pay tax. Who the hell knew who Duhamel was before this? A in between jobs factory worker who's been playing some tournaments lately and getting lucky. I think he'd have a good shot in court.
I don't know anything about him but very unlikely given he talked to the press. Even if he hadn't the publicity with something like this would lead to people talking for him. Once you are in the press CRA will come for you. The Leblancs would never have been bothered if not for the stripper incident. The only way he would have avoided being a pro is if he was very secretive from the start and had taken measures to hide his previous winnings.

Quote:
Also assuming he NEVER wins a single dollar more from the live event circuit.
I don't believe you have a clue what your own argument is. Him winning more on the live circuit means more tax payable that he has to recover. The fact that I assume he will win is why it is impossible because the gap between tax paid and sponsorship will always increase every year that his winnings are greater than his sponsorship. If his winnings fall to being low he'll eventually lose the sponsorship. Do you understand?
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Old 11-24-2010, 08:45 PM   #1465
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Re: Canadian Online Poker Tax Thread

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No obviously to recover something means to end up back as before.



Because as was already stated he owes $4.275M on the ME win. $2.8M is less than $4.275M



I don't know anything about him but very unlikely given he talked to the press. Even if he hadn't the publicity with something like this would lead to people talking for him. Once you are in the press CRA will come for you. The Leblancs would never have been bothered if not for the stripper incident. The only way he would have avoided being a pro is if he was very secretive from the start and had taken measures to hide his previous winnings.



I don't believe you have a clue what your own argument is. Him winning more on the live circuit means more tax payable that he has to recover. The fact that I assume he will win is why it is impossible because the gap between tax paid and sponsorship will always increase every year that his winnings are greater than his sponsorship. If his winnings fall to being low he'll eventually lose the sponsorship. Do you understand?
Your logic is flawed. I'll make an oversimplified example to illustrate the point clearly. 48% of $8,944,310. So the exact number is 4.29M. 4.29M/0.104 = 41 (based on 104k/year after 48% tax on 200K).

You said 38 years not counting any of his additional income tax. Also you now say that the more he wins on tournaments as a result of this sponsorship the further he gets from breaking even on the tax?

Lets actually be realistic and accept that his deal for this year alone is at least $1,000,000. After tax he's got $520,000 more. Now lets say for total simplicity he won $10,000,000 in tournaments. After tax he's got 5.2M. So now he's 5.72M that we would never have had if he'd not been a PS pro. 5.2M -4.29M = 910,000 profit. But your saying the more he wins from his pro live tournament circuit the further he gets from covering that initial 4.2M in tax he had to pay? That's absurd. The more he makes out of this sponsorship deal the closer he gets to making the tax hit worthwhile regardless of the additional tax he pays.

Obviously realistically it would take him many years of grinding the live circuit to actually make that money back but I'm just trying to make this as clear as possible for you.

About the "Pro" issue it's really another issue all together. You have no idea how it would end in court if he never openly accepted pro sponsorship and he was careful what he said to the media.
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Old 11-24-2010, 08:51 PM   #1466
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Re: Canadian Online Poker Tax Thread

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Him winning more on the live circuit means more tax payable that he has to recover. The fact that I assume he will win is why it is impossible because the gap between tax paid and sponsorship will always increase every year that his winnings are greater than his sponsorship. If his winnings fall to being low he'll eventually lose the sponsorship. Do you understand?
This is another area where you're straying from the main argument and your logic is flawed. Your point here is based on some fantasy premise that if he dodged the sponsorship he'd be able to continue for years tax free playing all these live events on his own bankroll. Like you said, he's been noticed now. So if he did refuse sponsorship and claim pure amateur status (like Darvin Moon), but then kept showing up all over the news shipping all these 6-7 figure cashes he's going to pay that tax anyway or go to jail for tax evasion. So the extra tax he's going to pay on all his future winnings is irrelevant to the argument at hand.
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Old 11-24-2010, 09:09 PM   #1467
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Re: Canadian Online Poker Tax Thread

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About the "Pro" issue it's really another issue all together. You have no idea how it would end in court if he never openly accepted pro sponsorship and he was careful what he said to the media.
I've been reading more and here is his online results

http://www.pokerprolabs.com/LeJohn54/pokerstars.aspx

http://www.pokertableratings.com/sta...earch/LeJohn54

If he didn't openly accept a sponsorship deal and was tactful with the media I don't think he'd have a ton of trouble in court.
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Old 11-24-2010, 09:15 PM   #1468
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Re: Canadian Online Poker Tax Thread

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This is another area where you're straying from the main argument and your logic is flawed. Your point here is based on some fantasy premise that if he dodged the sponsorship he'd be able to continue for years tax free playing all these live events on his own bankroll. Like you said, he's been noticed now. So if he did refuse sponsorship and claim pure amateur status (like Darvin Moon), but then kept showing up all over the news shipping all these 6-7 figure cashes he's going to pay that tax anyway or go to jail for tax evasion. So the extra tax he's going to pay on all his future winnings is irrelevant to the argument at hand.
Are you even capable of reading?

My response was to your claim that he would recover the tax money via sponsorship. He won't. It will take $8.25M in sponsorship to have an after tax gain equivalent to his tax liability for the ME win. It is very unlikely that he will ever get $8.25M in sponsorship.

I then said this is all just a hypothetical if the choice was given between being a sponsored pro and being taxed or not sponsored and not taxed then the second is always better unless your total sponsorship is equal to or greater than your total winnings. I then made it clear that the choice is not given in situations like this but that we were talking about hypothetical situations where there is much less publicity.

Anyway. I'm done. You don't know what you are talking about and it is tarding up the topic. The only valuable information in the last twenty posts is that he should be moving to Alberta before the end of the year if he wants to keep $1M more.
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Old 11-24-2010, 09:41 PM   #1469
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Re: Canadian Online Poker Tax Thread

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Are you even capable of reading?

My response was to your claim that he would recover the tax money via sponsorship. He won't. It will take $8.25M in sponsorship to have an after tax gain equivalent to his tax liability for the ME win. It is very unlikely that he will ever get $8.25M in sponsorship.

I then said this is all just a hypothetical if the choice was given between being a sponsored pro and being taxed or not sponsored and not taxed then the second is always better unless your total sponsorship is equal to or greater than your total winnings. I then made it clear that the choice is not given in situations like this but that we were talking about hypothetical situations where there is much less publicity.

Anyway. I'm done. You don't know what you are talking about and it is tarding up the topic. The only valuable information in the last twenty posts is that he should be moving to Alberta before the end of the year if he wants to keep $1M more.
You clearly have some low self esteem issues. Throwing out personal insults. I know you like to be the know it all in this thread and you're used to guys like mastertop101 making you feel smart.

You said his sponsorship deal wasn't worth more than 200k. Who doesn't know what he's talking about? Joe Cada got around 1 million for his first year.

You said it would take 38 years at 200k/year BEFORE additional tax. This is clearly wrong since I clearly showed the math for 41 years AFTER tax which is a massive difference and still based on your ridiculous 200k figure.

You said he would still be a lock in court for being proven to be a professional player if he didn't accept sponsorship. You have no way to prove this.

Finally your last post does have something. It's clear and concise about our argument. Is the sponsorship deal worth 8.25M over the course of Duhamels entire life? I think it's not impossible and you disagree. That's what all this really boils down to. That's fine you're entitled to your opinion but you didn't need to be pretentious and arrogant about it.

I mean you went as far as to say it was "mathematically impossible" for him to get 8.25M out of this deal in his entire life. He's getting at least 1 million out of it in his first year. It doesn't take a stretch of imagination to think he could make well over 8.25M riding this out for a decade.

About "useful information in the past 20 posts," None of this is useful. He's not going to read this and move to Alberta. We're just discussing the ramifications of publicly claiming pro status after a big score and the value of sponsorships for our own interest.

You're then one throwing out 38 year figures and 200k guesses that are totally off and then saying I'm not on the main point.

Last edited by ebffs; 11-24-2010 at 10:02 PM.
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Old 11-24-2010, 10:28 PM   #1470
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Re: Canadian Online Poker Tax Thread

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that whole conversation is very tilting to read. I don't know why there are paragraphs of arguments. Henry's point is simple-- from this point on ALL his winnings + sponser deals will be taxed at over 40% rate i imagine, therefore it is not like he can just make 4.7M and he will have that money back...
Exactly. He has to make 4.7/0.48 = 8.75M. But he has his whole life to get it done and he's getting 1M just in his first year minimum, so it's not impossible. Henry said "mathematically impossible." It really is a simple argument.

It was Henry who derailed it with a ton of ridiculous statements:

Quote:
Not even close. I highly doubt Stars is paying people $8.7M a year for sponsorship.
Like for some reason Duhamel has to earn it all back in one year of being sponsored. The point is if Duhamel turned it down this year it's not like he's going to have the offer waiting for him.

Quote:
This is getting boring but at $200k/year it would take 38 years not 20 to recover the WSOP taxes.

So at the end of 38 years he recovered the taxes from the ME but what about all the taxes on his winnings 2011+
This 38 year figure is just plain incorrect.

Quote:
I don't believe you have a clue what your own argument is. Him winning more on the live circuit means more tax payable that he has to recover. The fact that I assume he will win is why it is impossible because the gap between tax paid and sponsorship will always increase every year that his winnings are greater than his sponsorship. If his winnings fall to being low he'll eventually lose the sponsorship. Do you understand?
Now he's implying that by accepting a sponsorship deal it will affect whether or not future winnings are taxable, which is directly contradicting what he's previously said.


As I previously said it all boils down to whether or not accepting a sponsorship deal here and now can lead to 8.7M in earning over the course of his life. I'm simply saying it's entirely possible. Henry is saying it's "Mathematically impossible."

You're totally correct YouSureSir, it should have been a two post exchange if not for all this other dribble Henry is posting (quoted above).
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Old 11-25-2010, 10:36 AM   #1471
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Re: Canadian Online Poker Tax Thread

An amazing thing is that Duhamel would be able to buy a nice place in Banff (or wherever) in Alberta, establish himself there as a resident prior to December 31, 2010, and with the tax savings from doing so, pay for the nice place in Banff.

This is all because we have a quick and dirty rule for determining provincial residence of individuals as being the province in which they were resident in on December 31 of each tax year.

There would be some paperwork and a quick R/E deal involved of course in leaving QC and becoming resident in AB, but it would not be prohibitive (and might be fun).
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Old 11-25-2010, 11:43 AM   #1472
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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.
Let me be clear - you think that's FAIR? I sure as hell don't! Let's not consider Duhamel for a moment - let's consider the grinder on pace for $75K in earnings this year. He has every right to be pissed that he has to fork over ~$30K to the state while Jarvis gets to keep ~2.5 times his gross income in tax he can and should pay.

If you can book $1M in gross at the WSOPME you are no amateur in my book why should the law make distinction on account of subjective crap like your lifestyle.

I do think most poker pros will tolerate paying tax on their earnings but only so long as everyone else does too. We all want a fair and honest game don't we?

Also note that under the present system it's the CRA that decides whether you're an "amateur" or a "professional." If you disagree with the CRA the onus is on YOU to take THEM to court. The burden is on YOU to prove beyond reasonable doubt that you're not a pro.

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Old 11-25-2010, 11:46 AM   #1473
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Re: Canadian Online Poker Tax Thread

Rupert, things are not as bad as you make them out to be. The legal authorities are rather pro-player rather than pro-CRA. You may have already seen this, but others may appreciate this link to a Canadian poker tax ebook from taxwiki.ca.
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Old 11-25-2010, 12:03 PM   #1474
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Re: Canadian Online Poker Tax Thread

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Let me be clear - you think that's FAIR?
Yes. I don't see how anyone could argue that it is not fair. The reason we have two different treatments is based on the distinction between windfall and income. The amount is of money involved is irrelevant. You seem to be basing your reasoning on the claim that to win WSOP ME you have to be a pro but that is not true.
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Old 11-25-2010, 12:14 PM   #1475
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Yes. I don't see how anyone could argue that it is not fair. The reason we have two different treatments is based on the distinction between windfall and income. The amount is of money involved is irrelevant. You seem to be basing your reasoning on the claim that to win WSOP ME you have to be a pro but that is not true.
You don't have to play full time but you need both luck and skill on your side and let's not underemphasize the skill. If the last 2 posts are what's to go by then Duhamel really should drag the CRA though the courts whatever the costs - it's a cheap call to retain counsel when one considers the pot he'd be playing for.

Rupert
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