Canadian Online Poker Tax Thread

[Steve9393]

This is a great thread. Lots of info and nice to see some of the Canucks here. Has anyone ever had any problem withdrawing some winnings from their PP account? I know it's been over 2 months and have not received my bonus caps yet...so now wonder how long it would be before receiving some of my withdrawal profits. Anyone know?

[KaiShin]

Poker's not my full time job, but this is a great read with lots of fantastic info nonetheless.

[synthtrance]

Great thread, some really good information here.
Thanks for the advice TorontoCFE.
I hope you won't mind me pm'ing you to discuss a few things.

[lozen]

Here's one inportant thing to keep in mind on this issue.
All other court systems in Canada you are innocent till proven guilty. Only exception is Tax. You are guilty till you prove innocence.

Also not sure if this case has been decided but in Ontario they are going after the kids that play proselect ad make tons doing it. These guys were so good Ontario changed the maximum bet at each location so they have to drive around and place lots of small bets. I made a good chunk of chnage playing BJ for three years online and checked the taxlaws out. I do suggest keeping your neteller transfers smaller and utulize the neteller card even with the fees as this would be hard to tack. Bottom line is if you have a fulltime job you should be safe.

Though I have shredded every peice of info from my BJ bonus Hunting days

[sourbeaver]

There is an important point that I don't think has been discussed.

That is, how do you determine your poker income for a given fiscal year.

Is it:

- Added value of all poker accounts + Neteller + withdrawals
- Only amounts going and remaining in Neteller + withdrawals
- Withdrawals to your bank account

Example:

A player has made 10k profits in 2004. 5k remain in different poker accounts, 3k are in Neteller, 2k have been withdrawn to bank account.

What portion of the profits should be declared for 2004 ?

Can they be considered profits before they are withdrawn to a bank account ? Much like a stock speculator who doesn't have to declare capital gains that are not locked in.

Is Neteller considered merely an extension of poker accounts or is it considered as a bank account for tax purposes ?

I really wonder if I should file a T1-ADJ, and if so, how much I should declare.

[gamblor333]

Some great info in this thread. Thanks TorontoCFE for all the advice!

[TorontoCFE]

Poker income for the year, strictly speaking, would be
easiest calculated by:

Value of all accounts Dec 31 2004
+ any amounts due you but not yet in your account (rakeback, tourny winnings not paid out yet)
+ withdrawals made during 2004
- deposits made during the year
- account balances Dec 31 2003

Technically, all profits as calculated above should be declared if you were in the "business of poker" and none otherwise.

Profits are considered taxable wehn earned not when converted to another asset (another account) or when received.
Profit is "locked in" when you get up from the table.

Neteller is just another bank account or asset treated no differently than any other account whether it be bank, mutual fund, brokerage or funds on deposit at a casino cage.

What to declare is really based on the formula:

Earnings from the business of poker (not necessarily ALL poker earnings - this is a key point I can elaborate on)
is your start. You then deduct poker expenses - car and travel expenses, internet connection fees, poker books, courses,etc., the portion of your rent or mortgage related to the space you use only for poker - what ever else you can find. This would give you the net taxable income you need to worry about.

You then can work backwards:
If you have no other income ,you have a personal exemption that allows you to make almost 10k a year taxfree.
Deduct that and any other deductions you have (spousal, educational, etc.) andyou have the amount of income sbuject to tax.

You then have some choices depending on your situation - you can put the difference into an RRSP if you have room, etc. so that your income subject to tax is as small as possible.

To answer the question of what you declare, see the above calcualtion. The only flexibility is what portion of your income is "business". Even if you are a true pro player, then winnings from games that are not your "normal" ones may not be taxable. If you get lucky and wina big multitable, then that would likely be taxfree- unless you are in the business of living off of the big tournies.

[4thstreetpete]

Found some good info on Pokereh.com, pretty much reiterates what's on this thread but useful nonetheless.

[ QUOTE ]
Do Canadian poker players have to Claim Poker winnings on their Taxes?





Thankfully, poker winnings both online and in casino poker rooms are non taxable at this time. The government is attempting to pass laws that would require you to claim any and all winnings from online gambling, but at this time, as a casual poker player, there is no need to claim your poker winnings.





Typically, the government sees all gambling in the same light. As a losing proposition for the majority of people. There are regulations, however, for "professional" gamblers. If you make a living playing cards, you are considered by the Canadian government to having a profession, and your winnings are taxable. If you "apply skill and investment to achieve a profit", you should be paying taxes. As quoted from the Canadian Customs and Revenue Agency: "Winnings derived from a dedicated approach to gambling is taxable income".





If you do play poker for a living, there is good news. The majority of the investments made to play poker can now be tax write offs. Travel, meals, hotel stays, etc. that are involved in your poker playing can now be written off.





SPECIAL NOTICE:I received much of this information directly from the mouth of my tax man. He told me that I needed to keep a record of all profits from online poker, so in the event I was audited, I had all of the information about the extra money going through my bank account. Any winnings (and losses) as a result of online poker, or real life poker, should be kept and recorded.





I recommend using Neteller for online poker, because you can transfer funds between poker rooms, without the hassle of using Credit cards. Neteller also provides an ATM card, that can be used to withdraw money directly from your account, providing nearly instant access to your money. This takes away from having to get the poker room to send you a cheque, and having to deposit it into an account. It also helps to keep track of your poker bankroll.





Legal Notice: All information on this website regarding tax laws is for informational, and is not legal advice. You should always consult with legal council if you have a legal issue.


[/ QUOTE ]

http://www.pokereh.com/legal/taxes.html

[Wires]

Not to mention all of the promo material for the Canadian Poker Tour Finals are touting a $1 million tax free prize pool.

These advertisements are everywhere - in magazines, one the web, etc...

Things may change but for now the government views poker winnings the same as hitting the 649 - a winfall. A few may show a profit but overall the government views gambling as (extracted from your linked article) "a losing proposition for most players".

[King Jak]

[ QUOTE ]


1 - Since I have been making withdrawals from neteller straight into my Canadian Bank account I am leaving a paper trail of income. Does this mean I should declare this?

2 - I have made a couple withdrawals by using the Neteller Debit card - is this trackable by Revenue Canada?



[/ QUOTE ]

I believe that neteller asks you for your social insurance number in case Revenue Canada needs to tracks stuff. I asked the people in Calgary (neteller's office) why it was required and do they forward information to the CCRA. They said that they would if required. And that CCRA requires you SIN number.