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Old 03-18-2011, 04:26 PM   #1576
TaxGuru
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Re: Canadian Online Poker Tax Thread

Now let's consider the Terms and Conditions of Use for Party Poker: https://secure.partyaccount.com/abou...&brandID=PARTY

Quote:
17. FORFEITURE & ACCOUNT CLOSURE
17.1. WE RESERVE THE RIGHT, IN OUR UNFETTERED DISCRETION AND IN RELATION TO YOUR ACCOUNT, ANY RELATED ESP (as that term is defined at clause 8) ACCOUNT, ANY ACCOUNTS YOU MAY HAVE WITH OTHER SITES AND/OR CASINOS AND/OR SERVICES OWNED OR OPERATED BY OR ON BEHALF OF THE GROUP AND, IN THE CASE OF YOUR USE OF THE GAMING SERVICES, ANY SERVICES THAT SHARE THE SHARED GAME/TABLE PLATFORM, TO TERMINATE THESE AGREEMENTS, WITHHOLD YOUR ACCOUNT BALANCE, SUSPEND YOUR ACCOUNT, AND RECOVER FROM SUCH ACCOUNT THE AMOUNT OF ANY AFFECTED PAY-OUTS, BONUSES AND WINNINGS IF:
17.1.1. You are in material breach of any of these Agreements;
[...]
25. ASSIGNMENT
We reserve the right to transfer, assign, sublicense or pledge these Agreements, in whole or in part, to any person (but without Your consent) without notice, provided that any such assignment will be on the same terms or terms that are no less advantageous to You. You may not assign, sublicense or otherwise transfer in any manner whatsoever any of Your rights or obligations under these Agreements.
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Old 03-18-2011, 04:34 PM   #1577
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Re: Canadian Online Poker Tax Thread

I doubt that the poker sites will want to allow anything other than play by individuals. It seems obvious to me that if I were advising one of these sites that I would not want to allow a corporation to be playing. Permitting play on behalf of a corporation opens up the possibility of a claim by you that you are simply an agent of the corporation and thus can invoke the limited liability of your principal. The sites can (and I think do) shut down this possibility by requiring that each player have only one account, that it be in their own natural name, that they not permit the use of their account by anyone else, and that they do not do allow any third parties to be assigned or otherwise transferred any rights under the agreements.

This would be a very strong factor in favour of denying you the benefit of your claimed corporate status for your gambling activities if you were ever challenged by the CRA. They could allege that you were engaged in a sham or an ineffective transaction, particularly in light of the recent jurisprudence on shams.

If you were advised to adopt a corporate structure by a professional adviser, you might consider pursuing them for not having given you professionally responsible advice.

I am not taking any stand on whether any particular strategy works or not. I am also not providing legal advice. I am just pointing out that you need to think about all aspects of the legal environment before you decide upon a course of action, and illustrating some of the concerns that could emerge.
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Old 03-18-2011, 08:02 PM   #1578
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Re: Canadian Online Poker Tax Thread

Slightly off-topic but quick Canadian tax questions given the quality of tax related knowledge here.

I have a portfolio of Canadian stocks, U.S. stocks and some international ETFs. It's my first year having a wide portfolio and filing them in my tax return. I assume I claim dividends received and capital gains (if I sold and profited from that transaction).

1. How much dividend percentage will I actually keep after Cdn taxes, and after U.S. taxes, of an equity, supposing it is paying a 4% dividend?

2. Should I keep U.S. or Cdn equities in my TFSA?

3. Any other general tips to making sure my tax season is most efficient and getting the highest returns regarding Cdn, and U.S. dividend stocks?

Thanks for any help.
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Old 03-18-2011, 08:44 PM   #1579
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Re: Canadian Online Poker Tax Thread

kind of unrelated, but in nov 2009 i incorperated and it was easy process. I never used the corporation though it just sits, and i just have been paying the standard way as self employed. I didnt make a crazy amount and didnt want to deal with setting up payrolls and dividends it all overwhelmed me.

Anyways to the point, i know you are supposed to file some form every year when you have a corp and i expected one day to receive a letter asking me to file and then i would figure it out and go file but nothing ever came. So do i need to just file myself or do they request it and then I do it, like will they mail me forms to fill out when it needs to be done?
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Old 03-21-2011, 01:26 PM   #1580
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Re: Canadian Online Poker Tax Thread

Hi, I am considering reporting taxes this year, i ve been a pro for about 4 years making 250k+ every year. Have not filed taxes once. someone told me earlier in the thread that all he does is file the tax as "untaxable income"(?) and he has been off the radar. Anyways, If i want to go talk to an accountant in north york/toronto area.. anyone know a good accountant that is familiar in this field to go to? if you do please send me a pm. Thanks
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Old 03-21-2011, 08:45 PM   #1581
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by banalanal View Post
Slightly off-topic but quick Canadian tax questions given the quality of tax related knowledge here.

I have a portfolio of Canadian stocks, U.S. stocks and some international ETFs. It's my first year having a wide portfolio and filing them in my tax return. I assume I claim dividends received and capital gains (if I sold and profited from that transaction).

1. How much dividend percentage will I actually keep after Cdn taxes, and after U.S. taxes, of an equity, supposing it is paying a 4% dividend?

2. Should I keep U.S. or Cdn equities in my TFSA?

3. Any other general tips to making sure my tax season is most efficient and getting the highest returns regarding Cdn, and U.S. dividend stocks?

Thanks for any help.
On dividends: Take what you earn, multiply it by 1.25, then deduct 13% to get the taxable amount of the dividend. Then you need to multiply by your marginal tax rate which could be up to about 43%.

Assuming you have an RRSP, you probably want to keep high potential growth stocks in your TFSA and other income in the RRSP.
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Old 03-21-2011, 08:47 PM   #1582
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Sojufiend View Post
Hi, I am considering reporting taxes this year, i ve been a pro for about 4 years making 250k+ every year. Have not filed taxes once. someone told me earlier in the thread that all he does is file the tax as "untaxable income"(?) and he has been off the radar. Anyways, If i want to go talk to an accountant in north york/toronto area.. anyone know a good accountant that is familiar in this field to go to? if you do please send me a pm. Thanks
There is no such thing as reporting untavable income. You simply say nothing if you don't think you're taxable and then if asked you say that you had
gambling profits.
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Old 03-21-2011, 08:48 PM   #1583
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by YouSureSir View Post
kind of unrelated, but in nov 2009 i incorperated and it was easy process. I never used the corporation though it just sits, and i just have been paying the standard way as self employed. I didnt make a crazy amount and didnt want to deal with setting up payrolls and dividends it all overwhelmed me.

Anyways to the point, i know you are supposed to file some form every year when you have a corp and i expected one day to receive a letter asking me to file and then i would figure it out and go file but nothing ever came. So do i need to just file myself or do they request it and then I do it, like will they mail me forms to fill out when it needs to be done?
A corp is reuired to file a tax return every year and they only contact you if you fail to do so within 6 months of th end of the corp's tax year.
Most provinces also reuire an annual declaration about the corp's officers, shareholders and address.
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Old 03-22-2011, 04:23 PM   #1584
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by TaxGuru View Post
Well, let's look at the Terms of Service for Poker Stars: http://www.pokerstars.com/poker/room/tos/



If you are playing on behalf of a corporation and have an employment agreement with the corporation, you are not playing "for personal entertainment" because you are performing your duties of employment. This violates the Terms of Service. The remedies for Poker Stars includes seizing all the money in your account. Pretty straightforward, right?
Wanted to point out that hundreds of people are backed for mtts and Stars allows it
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Old 03-22-2011, 09:29 PM   #1585
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Re: Canadian Online Poker Tax Thread

And there are pros publicly outing themselves as non-recreational players with no action taken

And there would be no other benefical parties to the accounts

And it would be impossible for sites to find out
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Old 03-23-2011, 09:59 PM   #1586
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by TorontoCFE View Post
And there are pros publicly outing themselves as non-recreational players with no action taken

And there would be no other benefical parties to the accounts

And it would be impossible for sites to find out
And you would have no recourse if they did and confiscated your account. Just another gamble I suppose.
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Old 03-29-2011, 03:43 PM   #1587
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Re: Canadian Online Poker Tax Thread

So is incorporating a legal choice for online poker players or not?

The issue is not clear at all. PS TOS seems to suggest no but people are saying it is allowed. Which is it?
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Old 03-29-2011, 03:45 PM   #1588
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Re: Canadian Online Poker Tax Thread

Come on, man. This discussion is right above you.

It is not allowed but you will probably get away with it.
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Old 03-29-2011, 03:52 PM   #1589
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Re: Canadian Online Poker Tax Thread

If it violates the T&C or not doesn't impact the legality. It is perfectly legal to do so.

It seems to violate the T&C but so do a lot of other activities such as selling action action, having backers, or being a professional player. The sites not only ignore these other violations of the T&C but actually have features designed specifically to facilitate them. There is also the question of how would a site even find out. My opinion is that they could take action against you but that they have no interest in doing so and likely never would.

An alternative to playing as a corporation would be to play as an individual but be staked by a corporation. This also violates the T&C as does any staking deal but unless they are going after everyone playing with backers I don't see how they can object.
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Old 03-29-2011, 03:57 PM   #1590
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Re: Canadian Online Poker Tax Thread

If it violates the terms of service, I'm definitely going to recommend against it. I thought it was a good idea at first to limit tax and legal liabilities but obviously it's all there in writing. I don't want any of my winnings being subject to scrutiny.

Oh. P.S. what you guys wrote up there about you making money as "yourself" and then writing a cheque to the corporation and then the corporation cutting you a cheque when you are in need of bankroll sounds really fishy. That's almost as bad as having the corporation's expense account paying for your rent and food lol
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Old 03-29-2011, 04:04 PM   #1591
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Re: Canadian Online Poker Tax Thread

No. If the corporation was paying for your rent and food that would be perfectly fine but the costs of that count as income for you personally.

There is nothing wrong with playing as a corporation if you play live. The only concern is because of the T&C but if people actually followed those literally then everyone being staked is subject to having their funds seized.
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Old 03-29-2011, 04:16 PM   #1592
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Re: Canadian Online Poker Tax Thread

Do you have any legal background?
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Old 03-29-2011, 04:17 PM   #1593
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Re: Canadian Online Poker Tax Thread

I have an LLB
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Old 03-29-2011, 04:20 PM   #1594
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Re: Canadian Online Poker Tax Thread

So you did a bachelor degree in Law.

Alright that qualifies as something.

In that case, wouldn't it be a conflict of interest if the company director's rent, food and entertainment was being paid for by a corporate expense account. I was under the impression that that was the case.
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Old 03-29-2011, 04:38 PM   #1595
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Re: Canadian Online Poker Tax Thread

It can be but it doesn't have to be. If you try to make it a company expense then that is one thing. If you log it as part of your compensation and claim it as income then it is fine as long as everything is disclosed. Nothing says you need to be paid in cash.
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Old 03-29-2011, 04:40 PM   #1596
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Re: Canadian Online Poker Tax Thread

Oh okay then we agree.

If you pay yourself a salary or in dividends, it's absolutely fine. In fact, that is exactly how I would do it. But in any other way, it would be subject to legal action.
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Old 03-31-2011, 07:23 PM   #1597
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Re: Canadian Online Poker Tax Thread

Just exactly how much am I allowed to win as a casual gambler/poker player? And does the government ever go as far as to prove whether you are a casual gamer or pro player through the court systems?

Just how grey is this subject?
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Old 03-31-2011, 07:28 PM   #1598
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Re: Canadian Online Poker Tax Thread

How much you win is only relevant in so much as CRA isn't going to bother. In theory if you meet the criteria in the test you could be considered a pro playing $0.01-0.02.
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Old 04-01-2011, 09:46 AM   #1599
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Re: Canadian Online Poker Tax Thread

Okay, what test?

Is there a copy of it somewhere on the net that is viewable?

We need to know more about how the system operates.
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Old 04-01-2011, 10:20 AM   #1600
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Re: Canadian Online Poker Tax Thread

It has been discussed multiple times in this topic.

It is outlined in an Interpretation Bulletin issued by CRA and available online. The link to that has also been posted in this topic.
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