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Old 01-06-2012, 05:21 AM   #1926
roy_miami
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Re: Canadian Online Poker Tax Thread

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Originally Posted by onnunniko684 View Post
Can someone please explain this article by Benjamin Alarie? http://www.theglobeandmail.com/news/...rticle1509810/

"Most Canadians believe, incorrectly, that lottery and gambling winnings are not subject to income tax."

I was under the impression that lottery and gambling winnings are DEFINITELY non-taxable.
Nothing in that article that hasn't been said a million times in this thread. If they can show you have a reasonable expectation to profit then you have to pay taxes, it doesn't matter if its poker, blackjack, horse racing or even the lottery in some cases.
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Old 01-06-2012, 09:12 AM   #1927
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Re: Canadian Online Poker Tax Thread

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Originally Posted by roy_miami View Post
Nothing in that article that hasn't been said a million times in this thread. If they can show you have a reasonable expectation to profit then you have to pay taxes, it doesn't matter if its poker, blackjack, horse racing or even the lottery in some cases.
The only issue is that it would be impossible without cheating or taking advantage of a design flaw to have a reasonable expectation of profit from house games or the lottery.

There was a period of time when scratch tickets could be identified as winners without scratching them. If someone made a living travelling from store to store to look at and pick the winning tickets then this would be subject to income tax. That is really the only incident with the lottery where I can see it happening. Any other scenario would require either superluminal signalling or paranormal powers -- neither of which I expect the courts to accept in the near future.

If card counting worked it would be taxable but under current blackjack rules it is almost impossible to argue that anyone can ever be +EV. The best bet would be to crack some sort of house game that relied on a PRNG (Keno was cracked in the late 90s) at which point winnings would be taxable. I'm fairly certain that modern games can't be cracked. There is a possibility of getting +EV situations in chemin de fer and under certain conditions craps and roulette but overall house games can't be beat.
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Old 01-08-2012, 07:43 PM   #1928
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Re: Canadian Online Poker Tax Thread

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Originally Posted by onnunniko684 View Post
does anyone notice that canada is like the uk and the us combined in terms of tax laws? like in the uk, gambling winnings are non-taxable, regardless of expectation or amount...
Can I suggest you and abandonedepsilon form a study group.
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Old 01-08-2012, 08:25 PM   #1929
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Re: Canadian Online Poker Tax Thread

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Originally Posted by onnunniko684 View Post
does anyone notice that canada is like the uk and the us combined in terms of tax laws? like in the uk, gambling winnings are non-taxable, regardless of expectation or amount...
It's actually pretty much identical to the US minus the enforcement.
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Old 01-12-2012, 10:14 AM   #1930
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Re: Canadian Online Poker Tax Thread

Hi guys, very useful thread overall, been following it for years

I was staked earlier this year (just before black friday) and made 36k of profits (the staker had sent me 6k and the terms were 50%). The staker was American, so I had to send him 24k (18k of profits and the original 6k) through a bank wire (because of black friday).

Let's say I made X this year overall in profits for myself, what's safer between declaring (X+18)k for the year and deducting 18k, (X+24)k and deducting 24k or only declaring X.

Basically I'm looking to raise as little questioning as possible. I don't care about the correctness of the tax report as long as no questions are asked. I'm wondering if the CRA can see the 24k international transfer, and on the other hand if I include the 18k in my tax report and then deduct it, I'm scared that it will trigger an audit if the CRA guy doesn't understand what a stake is. What's the best play?

FWIW the bank agent who helped me with the wire wrote "loan repayment" as justification, as she felt that mentioning the stake might have caused unnecessary complications with the money laundering folks.
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Old 01-13-2012, 12:07 AM   #1931
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Re: Canadian Online Poker Tax Thread

TorontoFCE, I would like to talk to you in private seeing as I have several questions I'd need to ask you regarding the Canadian taxes and general other subjects about Canada I'd like to discuss.

However I can't seem to be able to pm you. Please enable your pm's or get back to me.

Sorry for the off-opic guys.
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Old 01-13-2012, 02:35 AM   #1932
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Re: Canadian Online Poker Tax Thread

You need to have a certain amount of posts on the forum before you can PM someone. Not sure what that number is though.
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Old 01-13-2012, 02:57 AM   #1933
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Re: Canadian Online Poker Tax Thread

I don't think so, I tried randomly displaying the menu for several users and I had the option to email some of them. I think it depends on whether or not said user has activited pms for other users and not only admin (setting by default).
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Old 01-13-2012, 09:22 AM   #1934
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Re: Canadian Online Poker Tax Thread

New posters can't PM people. Am_man is right. You need to increase your post count first.
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Old 01-13-2012, 05:46 PM   #1935
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Re: Canadian Online Poker Tax Thread

Oh, fair enough. Thanks a lot guys. Once again, sorry about the off-topic. Lots of useful infos in this thread tho, real nice.
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Old 01-16-2012, 03:33 PM   #1936
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Re: Canadian Online Poker Tax Thread

Hi guys glad I discovered this thread. Anyways I have been play poker part-time for the last few years but my wife just cut back her hours so I can start playing full time. I'm trying to make the decision whether to start declaring my winnings or leave it to chance and probably have to pay down the road.

I'm probably going to start declaring my winnings since I plan on doing this long term, and probably the right thing to do. Along with I would like to mortgage a larger house fairly soon.

Anyways just wondering about your thoughts on first the use of poker points.. If I bought a toaster I wouldn't think that value would be taxable.. but if I took a cash bonus now it is? How about if I concierge a new car but they just put the cash in my poker account. Definitely a grey area for me.

Anyone have any more info on incorporation.. I know that poker sites don't allow it but isn't there a special "professional" incorporation that a like doctor would use?
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Old 01-16-2012, 04:21 PM   #1937
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Re: Canadian Online Poker Tax Thread

Of course if you bought a toaster it would be taxable. If you travel a lot an acquire travel reward points that you then use for personal use that is taxable. The same concept applies here.
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Old 01-19-2012, 04:09 AM   #1938
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Re: Canadian Online Poker Tax Thread

I read this thread and have 2 noob questions.

Assume your only source of income is 100k/yr from poker and you have 200k sitting in a checking acct and you dont pay taxes or file anything.

1. If you have told the bank you are self-employed or something similar, would this be a problem if you eventually got called by the CRA (Becuz saying self-employed implies you have an expectation of profit or whatever.) Should you go to your bank and say the money is from gambling winnings? Should you say you are currently unemployed?

Is whatever the bank has listed as your occupation something to be concerned about at all? What do you guys tell your bank?

2. What do you do with your money? If you put it into a savings acct or investments or whatever, then if you pay taxes on that income, doesnt that set off a red flag to the CRA that you somehow are getting interest on 200k but have never reported any income? If you dont pay taxes this is even more dangerous???? (tax evasion?)

Basically, what do people who dont pay taxes do with their money??? Just leave it in the checking acct?

Thanks in advance for any responses. Henry17 seems to be the expert on this topic, hopefully he can reply.
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Old 01-19-2012, 08:33 AM   #1939
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Re: Canadian Online Poker Tax Thread

I believe both TorontoCFE and TaxGuru are considerably more knowledgeable than I am on this subject but I will give it a shot.

1) Doesn't matter. By the time CRA is getting this information it is pretty much game over for the individual in question. The account history as well as the balance is what matters.

2) Maybe five years ago I would have answered but I'll have to pass now. I will say though that if your choices are not paying taxes but also not being able to invest the money or paying taxes and investing the money the math on this is pretty simple -- you are much better off paying taxes and investing. The options are not limited to those two mind you -- for example you can also invest and not pay taxes and hope it is never an issue which is likely the best choice for most.
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Old 01-19-2012, 08:51 AM   #1940
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Re: Canadian Online Poker Tax Thread

This hasn't been raised in this thread before, but my understanding is that if you take the position that you are not a taxable player and you have more than $100k held offshore, it is technically incumbent upon you to file and report these assets, since the assets will be considered to be "specified foreign property." There is a carve-out in the definition of "specified foreign property" in section 233.3 of the Income Tax Act, and again this is my understanding, if the assets are used in an active business. This means that you would not have to report the assets of $100k+ if you take the position that you are a poker professional earning income from a business.

This isn't something that I've thought a lot about, but it seems to me that it could conceivably apply to many people and is definitely worth looking into if you want to stay onside (as you should).
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Old 01-19-2012, 10:30 AM   #1941
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Re: Canadian Online Poker Tax Thread

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Originally Posted by onnunniko684 View Post
- you don't have to tell your bank anything, that's not their business. if you do have to say something then say gambling winnings and you're safe...
While that is true a bank also doesn't have to do business with you. My reluctance to explain some large transactions plus my unsatisfactory (yet truthful) explanation for other transactions led to Scotia freezing my accounts and then closing them. They basically gave me a cheque for my balance and told me to **** off. We have kissed and made up since then but that is not the only incident -- TD in the past froze accounts multiple times. Banks have responsibilities to monitor customers for money laundering and if you seem sketchy that is not going to help you.

Casinos also are required under anti-money laundering legislation to monitor their customers. I wasn't aware of this until some years back a casino approached me and started asking questions about source of funds and employment.

Quote:
-nobody here will tell you how to invest your money
I'm fairly sure he was asking for how do people fool CRA rather than actual investment advice. Plenty of people will give you mostly worthless advice on how to invest you money but I really doubt anyone will answer the question he is asking.
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Old 01-19-2012, 02:16 PM   #1942
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Henry17 View Post
I will say though that if your choices are not paying taxes but also not being able to invest the money or paying taxes and investing the money the math on this is pretty simple -- you are much better off paying taxes and investing.
If I were to pay taxes, I would just start from this year, and not say anything about previous years, right? I know zero about investing so the math doesn't seem obvious me. Any recommended reading?

Quote:
Originally Posted by Henry17 View Post
The options are not limited to those two mind you -- for example you can also invest and not pay taxes and hope it is never an issue which is likely the best choice for most.
1. This is not illegal or tax evasion? What happens if you get caught doing this?

2. How much would doing this increase the chance of getting a call from the CRA, compared to having the money sitting in a checking account? (I thought it would be a lot, but evidently no?)

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I'm fairly sure he was asking for how do people fool CRA rather than actual investment advice.
I know nothing about investing, do you have any advice?
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Old 01-19-2012, 04:28 PM   #1943
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Re: Canadian Online Poker Tax Thread

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If I were to pay taxes, I would just start from this year, and not say anything about previous years, right?
That would be one option. I'm not convinced you should start paying taxes at all and you really haven't explained why you feel like starting.

Quote:
I know zero about investing so the math doesn't seem obvious me. Any recommended reading?
BFI has a sticky with books. I assume most of them are decent although I do remember a few awful ones. I have weird views on books so don't have any personal experience.

Quote:
1. This is not illegal or tax evasion? What happens if you get caught doing this?
It isn't likely to be treated seriously. You would likely have to pay what you owe plus interest. You might have to pay a fine.

Quote:
2. How much would doing this increase the chance of getting a call from the CRA, compared to having the money sitting in a checking account? (I thought it would be a lot, but evidently no?)
I have no idea what CRA is flagging and I fairly certain it changes from time to time. I do know that I have poked them with a stick for years and years and they have been fairly pathetic in their efforts to pursue me.

Quote:
I know nothing about investing, do you have any advice?
I'd say that doing something you know nothing about is probably a bad idea. I fund myself conflicted because without investment income I feel that people are giving up a fairly necessary wealth building route but I also feel that the vast majority of people are not competent to manage their own investments.
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Old 01-19-2012, 04:41 PM   #1944
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Re: Canadian Online Poker Tax Thread

I don't plan on paying taxes, that was a hypothetical question.

So until I learn more about investing, just putting the money into a GIC or savings account is better than having it sit in a checking account, because I can make a trivial amount like 1-2% with minimal increased risk? And then not file anything on this interest?

Thanks for all the responses btw.
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Old 01-19-2012, 04:56 PM   #1945
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Aleatoris View Post
Hi guys glad I discovered this thread. Anyways I have been play poker part-time for the last few years but my wife just cut back her hours so I can start playing full time. I'm trying to make the decision whether to start declaring my winnings or leave it to chance and probably have to pay down the road.

I'm probably going to start declaring my winnings since I plan on doing this long term, and probably the right thing to do. Along with I would like to mortgage a larger house fairly
I have a few questions about this type of player. He played what he calls part time for the past few years or so, but according to tax rules it doesn't matter whether it is part time or full time. I assume that he has expectations of profits and has won a sizable amount during the past few years (lets say 5k per year for arguments sake) to be able to move into full time poker playing. Should he have deemed himself a pro player at some point during the past few years? If he wanted to declare previously unreported income, is it worth it for him to do so? If he does this voluntarily, he can avoid any penalties but if he leaves it to chance then there severe penalties.

The tax law regarding poker is really quite grey. If someone played .05/.10 Nl Holdem 20 hours a week and made only $1000 total in year, they could be deemed a pro player depending on interpretations. It would be nice if there was a certain $ figure you would have to make to become taxable. There are Cut and dry rules now for eBay sellers in Canada.

By the way Toronto, I'm interested to know more about the audits you recently handled involving poker players. If you are able to share,please do so.
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Old 01-19-2012, 04:58 PM   #1946
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Re: Canadian Online Poker Tax Thread

No. You have to file on investment income.
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Old 01-19-2012, 05:04 PM   #1947
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Re: Canadian Online Poker Tax Thread

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Originally Posted by getthatmoney View Post
I don't plan on paying taxes, that was a hypothetical question.

So until I learn more about investing, just putting the money into a GIC or savings account is better than having it sit in a checking account, because I can make a trivial amount like 1-2% with minimal increased risk? And then not file anything on this interest?

Thanks for all the responses btw.
I would say it is a bad idea to not file taxes on interest earned. The government would be able to see that the bank paid you x amount of interest but then they would see that you didn't claim the amount on your taxes.

If you want to say your poker income is non taxable that is fine, but any investment profits made from non taxable sources are indeed taxable and you should pay tax on them.
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Old 01-19-2012, 05:16 PM   #1948
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Re: Canadian Online Poker Tax Thread

Ok. Looks like I will just keep my funds in a checking account instead of a savings acct/GIC. Doesn't seem like its worth having to file, just to make a trivial amount of interest. If/when I learn about investing and the payoff could be higher, then I would do that and file on the investment income but not poker.
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Old 01-19-2012, 08:10 PM   #1949
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Re: Canadian Online Poker Tax Thread

I have a quick question.

Lets say somebody plays online for 5 years. In the first 3 years they are a losing player, then over the following year they improve a lot and make a steady profit. The 5th year the player goes pro. Understandably, the player could be liable for tax on his income from year 4.

My question is, could he write off his prior losses as a business expense? It would make sense that was the cost of learning to become a winning player.

Sorry if there is something painfully obvious that I'm missing here.
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Old 01-19-2012, 08:16 PM   #1950
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Re: Canadian Online Poker Tax Thread

why is rakeback taxable its its you giving them money and them giving you less back i dont think that is income
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