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Old 10-01-2013, 03:51 PM   #2276
harangutang
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Re: Canadian Online Poker Tax Thread

I started paying taxes on poker winnings and incorporated in 2009. Since then, I have shown a profit each year, but with many more losing months and less profit per year.

Recently I have begun looking for a job and have been volunteering and studying in my field (law).

I have not studied the decision in the entirety, but am also very curious about the possibility of not paying taxes going forward and applying to recover previously paid taxes, although I'm guessing the latter would be extremely difficult if I incorporated on the basis of sound legal advice, even in light of Radjonic?
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Old 10-02-2013, 09:40 AM   #2277
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by b_bylander View Post
I would also like to hear what the Canadian pros are doing in light of the Radonjic case. For those who have been paying taxes, are you going to stop? Are you going to try to recover your taxes paid like Radonjic?
Probably just going to wait and see how things pan out with the Radonjic case. I think taking things to court now would be a bit premature, but has merit. Using the Radonjic case as an excuse to stop paying (if you currently do) does not seem smart at all. OTOH, using the Radonjic case to justify continuing not paying seems very reasonable.
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Old 10-02-2013, 06:33 PM   #2278
ArnieAA
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Re: Canadian Online Poker Tax Thread

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Originally Posted by roy_miami View Post
Doesn't change much. The line "reasonable expectation of profit" is open to interpretation big time and in this case the judge decided the minister had to show more than: he profited therefore he had a reasonable expectation to profit.

The bottom line for me is it is possible to prove some poker players might have a reasonable expectation to profit but it would have to be done on a case by case basis and I doubt the CRA is going to want to fight every case in court. If you dispute this then tell me who has a reasonable expectation to profit in the Durrr vs Isildur match (besides Full Tilt)?

To prove a reasonable expectation of profit you need to back it up with math, you can prove the house has an edge in Blackjack, you can prove card counters can gain an edge, which shows they have a reasonable expectation to profit (but profit isn't guaranteed). With poker, even if you discount the rake, its hard to prove player A has an edge over player B because its not a static situation, in an instant Player B can adapt and gain the edge.
Having just re-read many of the related decisions, I believe that the "reasonable expectation of profit" test is only used to determine if losses can be deducted from other income. It does not pertain to whether winnings are taxable.

Someone try to convince me that I'm mistaken.
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Old 10-02-2013, 08:13 PM   #2279
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Re: Canadian Online Poker Tax Thread

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Originally Posted by ArnieAA View Post
Having just re-read many of the related decisions, I believe that the "reasonable expectation of profit" test is only used to determine if losses can be deducted from other income. It does not pertain to whether winnings are taxable.

Someone try to convince me that I'm mistaken.
Well, if you insist: http://csc.lexum.org/decisia-scc-csc.../1986/index.do
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Old 10-02-2013, 08:22 PM   #2280
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Re: Canadian Online Poker Tax Thread

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Originally Posted by b_bylander View Post
Hi guys,

I am an American professional poker player that moved to Canada after black friday. I currently plan to spend 11 months/year in Canada for the foreseeable future. I am here under a 'visitor' status that I apply to have extended every six months. I have no ties to Canada except for a Canadian bank account that I use for all my poker transactions. I have been torn as to whether I should be paying Canadian taxes or not. After reading the Radonjic case, as well as the article TaxGuru posted, I am leaning towards not declaring my income for Canadian taxes.

I would say that the only difference between myself and Radonjic is that I moved out of the US to continue playing. After reading the article TaxGuru posted, the thing that sticks out to me is that even if I have all the attributes of a professional poker player, it states: "...in light of the case law it would not be guaranteed that the minister would succeed in attempting to characterize the taxpayer as being in the business of playing poker."

Based on these two articles, am I correct in assuming the chances of the CRA coming after me in the future and winning their case would be quite slim? I know there can't be any guarantees, but I would like to hear a little assurance on this.

It is also worth noting that all gambling winnings are taxable in the US, so I would still be paying US taxes. I file as a "professional gambler" for tax purposes.
Hi bylander,
Could you explain how you are there under a visitor status and and apply for extension every 6 months? Did you apply in the US for anything, or did you simply enter Canada and receive a 6 months visitor time frame, and then you apply for an extension on this?
I am very curious about this, as I am deciding where to go in a couple of months - Canada (Quebec) is my first choice, and if what you're describing is possible, that would be fantastic.

Thank you
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Old 10-02-2013, 09:53 PM   #2281
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Re: Canadian Online Poker Tax Thread

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Originally Posted by TaxGuru View Post
Exactly. The cases here all relate to taxpayers attempting to deduct losses. The one statutory reference is "a business carried on for profit or with a reasonable expectation of profit". If a business is carried on for profit (a winning player), then the "or with a REOP" doesn't play according to the rules of logic.

Edit: the only time REOP does factor is when the business is not carried on for profit (a losing player) and the taxpayer is claiming the loss.
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Old 10-02-2013, 11:02 PM   #2282
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Re: Canadian Online Poker Tax Thread

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Originally Posted by lrgatsby View Post
Hi bylander,
Could you explain how you are there under a visitor status and and apply for extension every 6 months? Did you apply in the US for anything, or did you simply enter Canada and receive a 6 months visitor time frame, and then you apply for an extension on this?
I am very curious about this, as I am deciding where to go in a couple of months - Canada (Quebec) is my first choice, and if what you're describing is possible, that would be fantastic.

Thank you
^This. You apply on cic.gc.ca
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Old 10-02-2013, 11:38 PM   #2283
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Re: Canadian Online Poker Tax Thread

Hi guys, I am the applicant in the recent case. I was wondering when it would hit this thread.

We aren't out of the woods yet, but so far so good.

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Old 10-03-2013, 12:12 AM   #2284
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Re: Canadian Online Poker Tax Thread

Go, Pete, go!

Quote:
He is highly articulate, well-organized and well-versed in the jurisprudence applicable to his case.
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Old 10-03-2013, 12:51 AM   #2285
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Re: Canadian Online Poker Tax Thread

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Originally Posted by b_bylander View Post
^This. You apply on cic.gc.ca
Thanks for the info; I do have questions to ask you, wish you had the pm's a working.

-What did you tell them your purpose was when crossing the border?
-What do you say when applying for the extension?
-Where in Canada are you?
-Who do you bank with?

If you'd rather not say here, you can email me at my 2+2name (lrgatsby) at outlook.com

Cheers
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Old 10-03-2013, 01:03 AM   #2286
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by b_bylander View Post
Hi guys,

I am an American professional poker player that moved to Canada after black friday. I currently plan to spend 11 months/year in Canada for the foreseeable future. I am here under a 'visitor' status that I apply to have extended every six months. I have no ties to Canada except for a Canadian bank account that I use for all my poker transactions. I have been torn as to whether I should be paying Canadian taxes or not. After reading the Radonjic case, as well as the article TaxGuru posted, I am leaning towards not declaring my income for Canadian taxes.

I would say that the only difference between myself and Radonjic is that I moved out of the US to continue playing. After reading the article TaxGuru posted, the thing that sticks out to me is that even if I have all the attributes of a professional poker player, it states: "...in light of the case law it would not be guaranteed that the minister would succeed in attempting to characterize the taxpayer as being in the business of playing poker."

Based on these two articles, am I correct in assuming the chances of the CRA coming after me in the future and winning their case would be quite slim? I know there can't be any guarantees, but I would like to hear a little assurance on this.

It is also worth noting that all gambling winnings are taxable in the US, so I would still be paying US taxes. I file as a "professional gambler" for tax purposes.

Your a u.s. citizen right? Why are you trying to pay income tax to the u.s. and Canada? There's a tax treaty between the 2 countries that prevents you from double taxation i believe. Your only tax obligation on income is to the u.s. Someone please correct me if I'm wrong.
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Old 10-03-2013, 01:50 AM   #2287
b_bylander
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Re: Canadian Online Poker Tax Thread

Quote:
Originally Posted by lrgatsby View Post
Thanks for the info; I do have questions to ask you, wish you had the pm's a working.

-What did you tell them your purpose was when crossing the border?
-What do you say when applying for the extension?
-Where in Canada are you?
-Who do you bank with?

If you'd rather not say here, you can email me at my 2+2name (lrgatsby) at outlook.com

Cheers
Be honest when talking with the border. I tell them I'm there to play poker and explain the situation in the US. I bank with TD.
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Old 10-03-2013, 01:56 AM   #2288
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Re: Canadian Online Poker Tax Thread

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Originally Posted by Equal View Post
Hi guys, I am the applicant in the recent case. I was wondering when it would hit this thread.

We aren't out of the woods yet, but so far so good.

Is the appeals period for the government to appeal done? Of course, even if it is, how long they drag it out from here.... but good luck and good to see the "little guy" coming out on the right side for a change.
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Old 10-03-2013, 01:59 AM   #2289
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Re: Canadian Online Poker Tax Thread

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Originally Posted by king10clubs87 View Post
Your a u.s. citizen right? Why are you trying to pay income tax to the u.s. and Canada? There's a tax treaty between the 2 countries that prevents you from double taxation i believe. Your only tax obligation on income is to the u.s. Someone please correct me if I'm wrong.

If Canada determined that my winnings were taxable, they would have priority over the US to my taxes since all my poker is being played in Canada. The tax treaty means I would get a credit with my US taxes for the amount that I paid to Canada. Say I win $100,000 playing in Canada and Canada finds my winnings to be taxable. Lets say my average tax rate is 35% in Canada and 25% in the US. I would pay my $35,000 to Canada. I would still have to file a return with the US, but I would get a credit for the amount paid to Canada. Since I paid more in taxes to Canada than I owe to the US, I wouldn't owe anything to the US.
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Old 10-03-2013, 02:30 AM   #2290
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Re: Canadian Online Poker Tax Thread

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Originally Posted by bigblue1ca View Post
Is the appeals period for the government to appeal done? Of course, even if it is, how long they drag it out from here.... but good luck and good to see the "little guy" coming out on the right side for a change.
Apparently it will be at least "4-6 more weeks".
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Old 10-07-2013, 10:06 PM   #2291
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Re: Canadian Online Poker Tax Thread

Very interesting thread.

I'm in a bit of a unique situation in that I've backed a poker player this year. The question of whether he will claim taxes is still to be decided. He may or may not be considered professional. It seems to be open to interpretation. At the time of investment, I did not believe him to be professional, however over course year I am more unsure.

The payout structure has two components. One is that I will receive some profit as interest to the loan (regardless of his winnings). The second portion of the profit will be as a split of his earnings to a certain cap. The 'investment' was meant to cover one year of poker at which point my capital will be returned as well any profit.

This leads me to a few scenarios and questions.

1. If CRA determines his winnings are not taxable, does that imply my profit is also considered gambling and also not subject to tax?
2. Would CRA consider the two types of profit (interest vs. split winning) different? For example, interest implies a loan and split winning suggest a gamble/investment.
3. Does his decision to claim his taxes impact my decision on taxes?
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Old 10-08-2013, 07:35 AM   #2292
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Re: Canadian Online Poker Tax Thread

1. These are independent questions.
2. The interest is income. The other part of the return (if any) is also income.
3. These are independent questions.

Think about it this way: why did you back this player? Clearly you did it to earn income from the arrangement. Without knowing more, I cannot assume that there is any personal enjoyment to the arrangement. It is purely commercial. Presumably you don't like losing money and so set the terms such that you expected there to a profit at the end of the year. Thus, you should be reporting any surplus from the arrangement as income.
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Old 10-11-2013, 06:36 PM   #2293
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Re: Canadian Online Poker Tax Thread

Henry, I have some urgent tax Qs for you, can you please free up some inbox space, ty! Also Equal, and TaxGru I just PMed you and look forward to your responses!

Last edited by DepravedAce; 10-11-2013 at 06:42 PM.
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Old 10-26-2013, 02:44 AM   #2294
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Re: Canadian Online Poker Tax Thread

http://www.liquidpoker.net/poker-for...in_canada.html
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Old 10-29-2013, 09:09 AM   #2295
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Re: Canadian Online Poker Tax Thread

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Originally Posted by taikogod View Post
Taxguru, Henri, does this mean that this thread is over and everyone who's reported poker income can fistpump and ask for a refund?
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Old 10-29-2013, 12:15 PM   #2296
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Re: Canadian Online Poker Tax Thread

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Originally Posted by eX3cution View Post
Taxguru, Henri, does this mean that this thread is over and everyone who's reported poker income can fistpump and ask for a refund?
That thread doesn't mean anything. It is just speculation. This thread seems way more helpful.
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Old 10-29-2013, 12:48 PM   #2297
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Re: Canadian Online Poker Tax Thread

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Originally Posted by harangutang View Post
That thread doesn't mean anything. It is just speculation. This thread seems way more helpful.
I'm not talking about the thread itself, but the judgement. The liquidpoker thread itself is awful and has too many people voicing their personal opinions on whether or not it should be taxable instead of discussing the judgement and its impact on Canadian players.

Edit: for some reason, I hadn't seen that it was already discussed here. My bad.
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Old 10-30-2013, 10:45 AM   #2298
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Re: Canadian Online Poker Tax Thread

I feel I already know the answer to this, but I’ll post my situation anyways

A little about me:

1) I have a full time job that pays $85,000 a year.
2) I also do some freelance marketing work on the side and earn about $10,000 a year, which I also declare
3) I’ve been online sports betting casually for the past 13 years, losing between $1,000 and $10,000 each year from 2002 to 2012
4) This year I’ve adopted a very different approach which has resulted in over $150,000 in online sports betting winnings. My winnings didn’t come from one long shot bet but from 1000’s of bets with bet sizes ranging between $1 and $20,000. I place on average 10 bets a day, just about every day.
5) I spread my bets across multiple sports betting sites, looking for the best odds
6) In some cases I’ve been “limited” to the amount I could bet at some sports betting sites because they see me as a threat as I’m winning too much with them, and they could see that I’m always looking for value in the bets I place (ie placing bets only when they’re offering better odds than the competition).

Do you think the CRA will consider this 1st year of large winnings as me crossing the line to being a professional? Or does it take several years of consistent winnings?

Also, lets say for argument sake that I’m not considered professional this first year, but I continue at this 150k/year pace for the next 3 years. Will the CRA look back in 3 years from now and say that I showed consistent profit for the last 3 years so I am considered a professional and to be taxed for those 3 years (even though I wasn’t considered a professional when I was actually in my 1st year of profitability)?
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Old 10-31-2013, 05:22 AM   #2299
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Re: Canadian Online Poker Tax Thread

Hey sorry if this has been answered a lot before but couldn't find it in the last few pages or the OP. I am an american traveling up to montreal for the WPT, will I have to pay on taxes there or in the US or no taxes. Assuming I cash for +5k or so. Thanks
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Old 10-31-2013, 02:36 PM   #2300
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Re: Canadian Online Poker Tax Thread

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Hey sorry if this has been answered a lot before but couldn't find it in the last few pages or the OP. I am an american traveling up to montreal for the WPT, will I have to pay on taxes there or in the US or no taxes. Assuming I cash for +5k or so. Thanks
There is no withholding tax so any taxes you pay would just be part of your US tax return.
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