Originally Posted by Henry17
Except in his case the only reason he is choosing to study outside of Canada is because he has Incorporated and started treating poker as a business.
Actually no. The question is if you have a reasonable expectation of profit. That he is a student or has a job beyond poker is irrelevant to the criteria of the test. The only reason a second source of income matters is because of evidentiary issues.
I'm not sure I agree. My understanding, Henry -- and feel free to correct me if I'm wrong -- is that the *ultimate* question is whether the activity is being treated as a business, and the "reasonable expectation of profit" ("REOP") is only one of several factors that informs
a determination of that issue.
It is perfectly acceptable, is it not, to have a REOP without the income being taxable? If I'm a full-time school-teacher (getting a $40,000 / yr salary), but also an excellent high-stakes poker player who enjoys a few hours of high-stakes poker every night (for which I clear $200,000 / yr), it's not subject to CRA income taxes, correct? It seems like you're giving too much weight to the issue of profitability when you say that BECAUSE he has a REOP, then it is conclusive evidence that he is treating it as a business. I don't recall the name of the case, but wasn't there recently an important opinion in a sports-betting case involving two brothers who cleared something like $1M over a few years, and the court wrote that it wasn't simply the amount they won, nor the fact that they expected to profit, but rather the fact that all evidence pointed to them TREATING the concern as a business (e.g. extremely high degrees of organization, strategy, etc.)