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Old 12-07-2011, 04:56 PM   #1851
banalanal
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Re: Canadian Online Poker Tax Thread

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Originally Posted by TorontoCFE View Post

Much like poker, if there are inconsistencies in your story, they might look at you.
That was a beautiful touch. Thanks for keeping us informed. Any other advice for those making money playing fulltime poker, not claiming an income, and investing in dividend stocks? As in, are there any do's and don'ts when it comes time to filling a tax return?
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Old 12-07-2011, 06:33 PM   #1852
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Re: Canadian Online Poker Tax Thread

LMAO... HOW DO YOU KNOW WHAT I'M CURRENTLY DOING WITH MY TIME? That's exactly what I'm doing. How much are you making with dividends? and which stocks?
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Old 12-07-2011, 06:44 PM   #1853
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Re: Canadian Online Poker Tax Thread

There isn't much you can do in that situation. It isn't like you have any choice with respect to reporting dividend income. CRA can easily estimate how much your portfolio is worth from the dividends reported.

My concern is buying a property. Everything else I have under control but I've been playing with the idea of buying for a while now but I'm pretty sure that is going to cause problems.
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Old 12-07-2011, 08:15 PM   #1854
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Re: Canadian Online Poker Tax Thread

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Originally Posted by banalanal View Post
That was a beautiful touch. Thanks for keeping us informed. Any other advice for those making money playing fulltime poker, not claiming an income, and investing in dividend stocks? As in, are there any do's and don'ts when it comes time to filling a tax return?
Well you have to declare invesgting income or it becomes tax ev asion and I can't help you there. Just getting looked at isn't the end of the world. CRA asks and then you tell them you won the initial investment and probably no big deal.
If you get to talking serious money and over a long time then you might be nervous.

To lessen the questions, you could have some provable source of income (even a crap side job). If the initial investment isn't huge then they will assume it is savings or a gift so I recommend starting with smaller amounts and regularly putting more on the table from poker.
Be honest about all investing income. Don't be too flashy with income. Keep multiple accounts at different firms if they get sizable Invest in real property.
Really just common sense type things.

If you get to serious amounts of money then there are other things you can do that makes it less obvious to people what you own. Secrecy is not illegal if you are declaring the right investment income even if you actively obscure where it is.
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Old 12-08-2011, 12:37 PM   #1855
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Re: Canadian Online Poker Tax Thread

While I have nothing against actively obscuring wouldn't any deviation from standard be seen as evidence that you knew the winnings should have been subject to income tax?
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Old 12-08-2011, 02:41 PM   #1856
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Re: Canadian Online Poker Tax Thread

My opinion:
You are ok as long as there are other, legitimate reasons for doing what you do (ie obscuring is not your primary motive) and you are not falsely reporting (understating) income.

Blurring all of your financial transactions means there is no reason to think it is just to hide income and if you report legitimate, non "grey area" income you should be ok.

My experience has been that some high net worth people simply put such a value on privacy that they go to far greater effort and cost to keep things private than a money laundering or tax evader does. They pay all of their taxes but no one would know what they had.

If you make yourself look like that type then you have solid ground to stand on. The courts have ruled before that you can do anything legal to ensure privacy as long aas your motives aren't tax (or other law) evasion.
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Old 12-08-2011, 07:58 PM   #1857
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Re: Canadian Online Poker Tax Thread

This is the information I've been looking for.. tyvm for providing it..

Quote:
Originally Posted by TorontoCFE View Post
More than 90% of reviews are the result of tips from neighbours and other parties that know you. Most of the rest is referred to them from law enforcement, when they have looked at someone and decided to pass on a tip.
The CRA does not have access to you bank or cc records without already being tipped off about you and going through the trouble of getting judicial permission.
What they have access to are things like border records, FINTRAC filings, liens, mortgages, titles on real estate, press about you and other public records.

You are most likely to come to their attention (if they aren't tipped off) by claiming unusual amounts or types of deductions on your tax return or declaring you are involved in an unusual business or occupation.
Filing a large number for capital gains when you never report income might do it, as will saying you are involved in any activity that deals with cash mostly, or saying yes when they ask if you have more than 10k offshore when you have never reported much income.

Much like poker, if there are inconsistencies in your story, they might look at you.
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Old 12-08-2011, 08:00 PM   #1858
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Re: Canadian Online Poker Tax Thread

As for the income and investing options.. if you're declaring no income yet have investments that can yield sizable capital gains (ie. potentially something that may attract attention), is it a good idea to invest in rental property in the future for the sake of generating "income" in the form of rent? This way you no longer have a glaring $0 on your return..
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Old 12-08-2011, 10:35 PM   #1859
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by TorontoCFE View Post
More than 90% of reviews are the result of tips from neighbours and other parties that know you. Most of the rest is referred to them from law enforcement, when they have looked at someone and decided to pass on a tip.

The CRA does not have access to you bank or cc records without already being tipped off about you and going through the trouble of getting judicial permission.
What they have access to are things like border records, FINTRAC filings, liens, mortgages, titles on real estate, press about you and other public records.
Just want to confirm.. what you're saying is that you could be claiming $0 income yet have plenty of properties/mortgages.. and provided that the CRA hasn't been tipped off to take a look at you or that you haven't provided anything suspicious looking on your tax returns, they have no reason to care/notice the weird disparity that exists with no income yet owning multiple properties?
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Old 12-08-2011, 10:39 PM   #1860
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Re: Canadian Online Poker Tax Thread

And I guess just a more general question.. what do you guys think is the best idea for investments for a young poker pro not claiming taxes (ie. not wanting to attract attention) who has 6 figures to invest yearly?
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Old 12-10-2011, 10:11 AM   #1861
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Re: Canadian Online Poker Tax Thread

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Originally Posted by CapnRunGood View Post
And I guess just a more general question.. what do you guys think is the best idea for investments for a young poker pro not claiming taxes (ie. not wanting to attract attention) who has 6 figures to invest yearly?
Short the TSE.
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Old 12-10-2011, 10:27 AM   #1862
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Re: Canadian Online Poker Tax Thread

Interesting idea but even if you are right-- and I'm not sure if you are-- I think that is a little too advanced for him based on the wording of the question.
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Old 12-12-2011, 04:55 PM   #1863
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Re: Canadian Online Poker Tax Thread

There is a link to the new Canadian Tax Journal article, "The Taxation of Winnings from Poker and Other Gambling Activities in Canada":

http://ssrn.com/abstract=1971415
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Old 12-12-2011, 05:11 PM   #1864
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Re: Canadian Online Poker Tax Thread

Thanks
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Old 12-12-2011, 06:52 PM   #1865
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Re: Canadian Online Poker Tax Thread

Why can I not download the paper? Do I have to pay for it?
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Old 12-12-2011, 06:59 PM   #1866
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Re: Canadian Online Poker Tax Thread

No it is free.

I took a fast look at it. Two things stick out -- First, a casual reader will see it as more positive than it actually is. Second, the interpretation of the two most recent cases miss some fairly important points.
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Old 12-12-2011, 07:41 PM   #1867
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Re: Canadian Online Poker Tax Thread

You know what I don't get? Alarie's ebooks all state that income from gambling as a "business" SHOULD be taxed.

But most poker sites don't allow you to operate as a business in the first place, is that a misnomer? I mean it clearly states in the terms of use that the software can only be used for personal reasons only.

Do we need to bring this to Alarie's attention or is he already aware of it?
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Old 12-12-2011, 07:53 PM   #1868
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Re: Canadian Online Poker Tax Thread

Not allowing a corporation to hold a poker account is completely irrelevant to the issue.
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Old 12-12-2011, 07:54 PM   #1869
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Re: Canadian Online Poker Tax Thread

Sure it is, both negate each other.
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Old 12-12-2011, 08:03 PM   #1870
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Re: Canadian Online Poker Tax Thread

No.
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Old 12-12-2011, 08:04 PM   #1871
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Re: Canadian Online Poker Tax Thread

I'll get my lawyer on it.
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Old 12-12-2011, 08:34 PM   #1872
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
No it is free.

I took a fast look at it. Two things stick out -- First, a casual reader will see it as more positive than it actually is. Second, the interpretation of the two most recent cases miss some fairly important points.
No offense Henry, but I hate this about many of your posts.

What's the point of saying this if you're not going to elaborate, even briefly?
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Old 12-13-2011, 09:28 AM   #1873
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Re: Canadian Online Poker Tax Thread

Well the first part is pretty obvious. I suspect a lot of people will read that and think poker is not taxable but the writer specifically and repeatedly makes the point to say that a certain subset of the players do have to pay tax -- the vast majority of the people reading this topic likely fall into this subset.

The second point has been discussed previously when we discussed Epel and Leblanc. the writer focuses on the outcome and completely ignores what the decision says. In both cases gambling is explicitly stated to be be taxable but we end up with a favourable decision for the gamblers because of expert testimony -- in both cases the experts were wrong but CRA failed to respond with their own experts. The discussion of Epel as a case that establishes that poker is not taxable is very odd. The decision completely hinged on the testimony of John Turmel who is sort of a wacky character but also a professional poker player. The decision contrasts Tony and John and explicitly says that poker players like Turmel are taxable but poker players like Epel are not subject to income tax. The reality is that Epel was likely more like Turmel-- and given his tardiness in paying debts also likely exaggerating his wins-- but since Turmel was the only expert who testified and he got up and said that Epel was just a luckbox that was the end of the story. Had Turmel said Tony is a skillful player then he would have had to pay income tax. It is pretty clear that what this establishes is that poker is taxable and that the lawyers who work for CRA are not very good at their jobs.
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Old 12-13-2011, 06:02 PM   #1874
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Re: Canadian Online Poker Tax Thread

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Originally Posted by easternhelium View Post
You know what I don't get? Alarie's ebooks all state that income from gambling as a "business" SHOULD be taxed.

But most poker sites don't allow you to operate as a business in the first place, is that a misnomer? I mean it clearly states in the terms of use that the software can only be used for personal reasons only.

Do we need to bring this to Alarie's attention or is he already aware of it?
Why do you think the poker sites have an obligation to make it easy for people to structure their affairs for tax reasons?

Why do you think "personal reasons" excludes the possiblity of poker playing being a business?
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Old 12-20-2011, 04:07 PM   #1875
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Re: Canadian Online Poker Tax Thread

Just read the .pdf file above and clearly states that "There are relatively few cases that have found gambling gains to be taxable income in Canada. Moreover, despite the fact that the issue has been considered in a significant number of cases, not one reported Canadian decision in the past 56 years has found that gains from either card playing or betting on horses give rise to taxable income from a business."
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