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Old 12-23-2011, 07:50 PM   #1901
abandonedepsilon
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Re: Canadian Online Poker Tax Thread

since there's still no proof I'll just keep not paying my taxes then hehe
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Old 12-23-2011, 07:56 PM   #1902
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Re: Canadian Online Poker Tax Thread

There is proof -- TorontoCFE-- if I'm not mistaken-- has handled cases involving gambling and income tax including an audit this week.

Regardless of the existence of proof you should still not pay income tax.

The question of legality is different than the question of what you should do. Poker winnings are taxable income for the majority of people reading this topic but if you don't choose to pay income tax on them the odds are quite high that nothing will ever happen unless you bring attention to yourself.
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Old 12-23-2011, 08:33 PM   #1903
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Re: Canadian Online Poker Tax Thread

If the law states that pro players (organized, regular play with reasonable expectation of profit) must pay taxes, does the fact that the CRA hasn't gone behind them change anything? Sooner or later, they're bound to catch up with it, aren't they?
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Old 12-30-2011, 07:45 PM   #1904
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Re: Canadian Online Poker Tax Thread

On the topic of real estate investing..

I'm curious what people think about the risk associated with purchasing multiple properties when you have no reported income. (Henry, you mentioned in a response that you haven't "figured this out yet" and that you think it "could pose problems".. wondering if you could elaborate.)

The way I see it, generating rental income is likely a good move in the event that I've got capital gains in the future from stocks etc (so I avoid having a sizable capital gain reported beside a glaring $0 income..) I'm just curious if buying a bunch of property in the next couple years will put me in a higher risk of being audited in any way.. ie. can the CRA be notified through the buying process for whatever reason?
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Old 12-31-2011, 10:42 AM   #1905
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Re: Canadian Online Poker Tax Thread

The first issue involves money laundering legislation. Since residential real estate is actually a fairly effective method of money laundering varies parties in a RE deal are obligated to report suspicious purchases. You must also establish the lineage of funds used for a down-payment. This is likely not a major concern for most since my understanding is as long as the funds have been in a Canadian financial institution for either three or six months (I can't remember which) that is all they really look at. A friend of mine who received $80k from South America a few weeks before purchasing a home tripped this and had to jump though a bunch of hoops to establish where the funds came from. For most of you this is likely not a concern but still don't do major cash outs from poker sites that will be used for the deposit for at least six months just to be safe.

The second issue I see is that you need to tell the mortgage people something. Poker players can get mortgages in Canada as long as they have enough of a down-payment and are purchasing property in a major city but that requires going on the record as a professional player with your lender. I don't believe that lenders are obligated to report anything but if CRA gets interested in you they can likely get access to your loan documents where you stated that you have a reasonable expectation of profit from poker.

Lastly, there could be issues with just red flags being set off. This would be more for residential property than rental but first time home buyers get certain breaks on property taxes. I don't remember the specifics of these but if you claim them it isn't hard for CRA to work backwards from that to figure out the cost of the property and how you can't possibly afford that based on your reported income. I wish I knew more about this but I don't -- I used to know more when i was interested in buying but since I lost interest I just can't remember it which is actually scary and means I should likely sleep more and drink less.

Another issue with property is that it is physical. Again this would only really apply to people who have earned enough from gambling that their tax liability is high enough that they have taken measures to be mostly untouchable should CRA ever come after them. Once you start buy property that becomes much harder to do.

As a final point -- owning rental property in Canada sucks. It is not a good investment except in special cases so I don't see why anyone would want to do this.
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Old 12-31-2011, 12:22 PM   #1906
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Re: Canadian Online Poker Tax Thread

Interesting I didn't know that about laundering. So far I've purchased (2008) and sold (2009) a house in Toronto with a $100k+ down payment, and purchased a condo (2010) with a $125k+ down payment (that I still own). Haven't had any problems.. there were a few phone calls and meetings with my mortgage broker (who is a young guy and now understands my situation and has become more of a friend/acquaintance over the years) and I suspect he may have cut corners a bit to get the deals done but overall it didn't seem to be a big issue. I don't believe the funds were in my account for much longer than 2-3 months on either occasion. However, I am on good terms with my bank on a personal level at this point so maybe that helps.

I'm curious why you think owning rental property in Canada sucks.. just because in comparison to the U.S. it's much tougher on owners taxwise/rentwise/etc..?

I don't want to turn this into an investing thread, but I'm really curious what the consensus is on the smartest vehicles for us to be investing in given our goal of minimizing risk/exposure to the CRA.
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Old 12-31-2011, 12:24 PM   #1907
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Re: Canadian Online Poker Tax Thread

lmao not owning/spending is best to avoid the CRA
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Old 12-31-2011, 12:36 PM   #1908
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Re: Canadian Online Poker Tax Thread

If the $100k came from the sale of the home then it was in Canada. The money doesn't actually need to be in a bank account. They only need to be able to trace where it has been.

I am too fuzzy to read this but it seems to cover what I am talking about and since it is written by a lawyer likely correct.

http://www.bcrelinks.com/articles/kmw1.htm

Why RE sucks is simply because given the law is very anti-landlord it simply is not worth doing.

All investments require reporting the income to CRA so none of them are really better or worse with respect to hiding your income.
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Old 12-31-2011, 02:37 PM   #1909
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Re: Canadian Online Poker Tax Thread

I mean it's not as easy as saying "don't invest if you want to hide it" or "all investments require reporting income" etc..

For example I've currently got ~1/3 of my net worth in an aggressive mutual fund and it's been there for ~5-6 years.. (beat! ) But because it's designed to re-invest and not pay dividends, I generally don't carry any capital gains on a yearly basis until I sell the fund down the road. Thus, this avoids having a 5-figure capital gain combined with $0 income on a return. And by the time I ever sell the funds, it'll be so far down the road that I'll almost certainly have income from some other source and things don't look so strange. Clearly, this is a much better investment idea than producing high dividends etc.. These are the types of details/etc that I'm interested in discussing with various investment options.
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Old 12-31-2011, 06:41 PM   #1910
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Re: Canadian Online Poker Tax Thread

dividend income is not so great, the payout generally varies from year to year
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Old 12-31-2011, 06:44 PM   #1911
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Re: Canadian Online Poker Tax Thread

CapnRunGood,

I'm almost 100% sure drips need to be declared as income.
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Old 12-31-2011, 07:11 PM   #1912
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
people who have earned enough from gambling that their tax liability is high enough that they have taken measures to be mostly untouchable should CRA ever come after them.
Are you able to go into this further? What measures would said people have taken assuming they still want to invest but may not own RE?
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Old 12-31-2011, 07:55 PM   #1913
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by banalanal View Post
Are you able to go into this further? What measures would said people have taken assuming they still want to invest but may not own RE?
If you mean legal options -- you go see a professional. Tax is one of the most complicated types of law-- arguably the most complicated-- so DIY structuring of affairs is asking for trouble.

If you mean less than legal options then obviously no and I'd recommend against it since the odds of you actually making things worse are quite high.
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Old 12-31-2011, 08:42 PM   #1914
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Re: Canadian Online Poker Tax Thread

So if you go see a professional (a tax accountant or tax lawyer?), there are legal options of being "mostly untouchable should CRA ever come"?
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Old 12-31-2011, 10:22 PM   #1915
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Re: Canadian Online Poker Tax Thread

In terms of "not bringing attention to yourself", am I better off not filing at all or filing with no income?

Neither my wife and I have had any employment or investment income since I finished grad school (i.e. no T4 forms to file).
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Old 01-01-2012, 07:57 AM   #1916
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by banalanal View Post
So if you go see a professional (a tax accountant or tax lawyer?), there are legal options of being "mostly untouchable should CRA ever come"?
There are certainly things that can do to lower the amount but I have no idea where the line is drawn on what they can help you with before they get in trouble with ethics.

Quote:
Originally Posted by meow_meow View Post
In terms of "not bringing attention to yourself", am I better off not filing at all or filing with no income?

Neither my wife and I have had any employment or investment income since I finished grad school (i.e. no T4 forms to file).
No idea on if it helps you but you have no obligation to file unless you owe money or have been requested to file. If you don't file you don't get use of the TFSA which I really like. You also don't get HST rebates or stuff like the money they give to poor people who pay rent.
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Old 01-01-2012, 08:12 AM   #1917
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Re: Canadian Online Poker Tax Thread

For most people on this thread, please see a lawyer, it really is the best tip you're going to get.
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Old 01-01-2012, 01:42 PM   #1918
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by Henry17 View Post
CapnRunGood,

I'm almost 100% sure drips need to be declared as income.
The funds haven't received distributions for the past 2 years (but did in '08) and my finance guy says its because it's a growth fund and so it'll usually not pay out any distributions.. and as such I haven't received any tax slips for declaring the past 2 years.
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Old 01-01-2012, 09:07 PM   #1919
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by banalanal View Post
So if you go see a professional (a tax accountant or tax lawyer?), there are legal options of being "mostly untouchable should CRA ever come"?
There are things you can do - the more money you are talking about, the more options become feasible.

There are so many variables that it is impossible to give specific examples of what makes sense for any one person.
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Old 01-02-2012, 07:57 AM   #1920
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Re: Canadian Online Poker Tax Thread

Does anyone know how much it costs to lobby the government? Openmedia.ca is pretty successful at it... thought about getting something like that up and running.
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Old 01-02-2012, 08:46 AM   #1921
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Re: Canadian Online Poker Tax Thread

Open Media seems really good at raising money for Open Media. I have a feeling their motives might not be as pure as you think.

With respect to this topic why the **** would you want to whack a hornet nest? Any attempt at lobbying will make things worse.
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Old 01-02-2012, 09:06 AM   #1922
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Re: Canadian Online Poker Tax Thread

I disagree. I'll put it on my list of things to do.

By the way, how much do people in this thread make in poker?
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Old 01-02-2012, 09:18 AM   #1923
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Re: Canadian Online Poker Tax Thread

What kind of poker training sites have you guys been to?
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Old 01-03-2012, 06:24 PM   #1924
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Re: Canadian Online Poker Tax Thread

dividend stocks are not that reliable of an investment choice
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Old 01-04-2012, 07:46 PM   #1925
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Re: Canadian Online Poker Tax Thread

Can I ask why Poker is being targeted? I know people who make a living out of blackjack... both games are about skill and chance...
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