[TorontoCFE]

Thanks for the nice words.
I think the CCPC route is the best (from my perspective as an accountant and a poker player). I would consider it once you have a regular gaming income in the six-figure range or close to it.

I can outline the mechanics of how it works if someone really wants to go that direction, but essentially the benefits are:

- the bank account is in the corp name, creating a separation between you and the gaming activities. This can be useful if for some reason you don't want people to know you are involved in it (reputation, bitter divorce, business reasons) - it also allows better tracking of gaming income / losses

-you pay yourself a small salary (I'd say $1/yr to minimize payroll taxes and get max benefits), unless you have no day job, then it may make sense to pay yourself up to 80k salary to generate RRSP room. This RRSP room lets you invest earnings for the future and defers current taxes.

-You can deduct all kinds of reasonable, poker related expenses - if an online player, your internet fees, a portion of your home costs (if a place is used only for playing poker online), travel costs to play - a long list almost the same as if its you personally but it looks much cleaner to CRA if done in a corp name.
-The rest of the poker income is taxed when earned at the CCPC rate, about 20%, better than your personal tax rate.

-If you want to get the poker winnings from the corp to you for personal use, you can then choose to remove them as salary, dividends or a capital gain (even as a loan but then it gets complicated). Salary would cost you the most in tax and dividends likely the least and you have freedom to leave profits in the corp forever, pay only the 20% tax when earned, until you need the money and then take the money out later, at a tax-advantageous time.

- If you have a spouse or kids with little/no income, you can give them some shares in the corp and pays them dividends (assuming they know about the poker money). If it's their only income, there would be no taxes payable on it beyond the 20% the corp already paid, thereby lowering your tax total tax liability.

-You have legal protection, if you are acting in the corp's capacity; it has legal responsiblity and not necessarily you. This might be useful in extreme or risky situations.
I'm not sure it would ever be useful for me if I went that route, but if you want to lease a car in the company name or travel to exotic locales, then I can see it being useful.

-the corp would also be available to use in other business opportunities that come up in the future. Working through a corporate structure is the most flexible arrangement possible.

I see the ability to split income and decide on the timing and nature of the income as extremely attractive. It means you can play by the rules and pay the minimal amount of tax legally possible.

I haven't seen anyone using this structure yet (though there may be a lot out there) but I've toyed with it for a couple of years. It may throw CRA for a loop, but once they catch onto the potential of cracking down on gaming income, I bet it will be a popular and accepted tax planning method.

of course, there is a downside:
- cost to incorporate: about $1,000 once

- cost to prepare a corp tax return every year: depends on accountant, about $500/yr.

-occasional legal expenses to maintain the corp books - less than $1,000/yr.

-you have to keep books and records, but of course you should have these as well for yourself in case of an audit.

These costs really aren't too bad when you look at the flexibility you gain. Again, you need a decent regular gaming income to make it worthwhile but if you are in the six-figure range or close, then I'd recommend it (it's what I would do personally).

For the record, this advice can vary or be inappropriate in a given person's situation.
There are many other tax issues to take into consideration and you should spend an hour or two talking with a good advisor to see what you should do. I would need to look at a person's total financial picture to firm up any recommendations.

While I didn't really intend to solict any business, I am ready to help out with general questions and I am willing to discuss individual situations if desired.