Canadian Online Poker Tax Thread - Page 18

TorontoCFE · #**171** 09-01-2007, 11:44 PM

you don't list non-taxavle things.

Raven · #**172** 09-12-2007, 01:43 PM

I have a friend who has been pro for 2004-2005-2006. A local newspaper wrote an article on him with his full name. The CRA followed that and come to see him. They declared his poker income taxable. He contested by a letter (but im not entirely sure on how he prodeded here) He just received a letter from the CRA that they maintain their decision. He have some time to contest in a tribunal. Also, I'm not sure if its with the Quebec revenue agency or the canadian one that he is talking with, i will ask him.

He is a small online pro who didn't won much but enough to make a living. After deducting expenses he own 14 000 $. He is not sure if he want to go to the tribunal because some lawyer told him it would cost 5000 $.

Any help or thoughts ?

Henry17 · #**173** 09-12-2007, 04:56 PM

I would need to read the article to be sure but I think your friend screwed himself.

Gambling winnings are not taxable in Canada unless they are engaged in as a business. This is a question of fact and the criteria was set out in Morden(1961). I only scanned the thread but I'm pretty sure I saw these criteria already mentioned so I won't bother to go into detail. Sufficient to say odds are that your friend in his interview said things that would put him clearly on the business side of the question.

My advice is simple. Keep a low profile and you'll be fine. If you do gamble professionally then yes it is income and you do owe taxes but my experience has been that unless you do something to draw attention to yourself you'll be fine.

skier_5 · #**174** 09-12-2007, 05:19 PM

anyone know/care to elaborate more on non-resident status? I recently left Canada so i don't have to deal with this gray area.

I closed my bank accounts, sold my truck, gave my [censored] to my parents, etc. Should I consult someone to make sure I took the necessary steps?

Henry17 · #**175** 09-12-2007, 06:39 PM

Well if you just recently left then you probably are still considered a resident for 2007 since you were in Canada for greater then 183 days.

If you do not have a bank account, do not own property in Canada and do not spend more then 183 days in Canada in 2008 then you are no longer considered a resident.

Raven · #**176** 09-12-2007, 06:46 PM

I think the article only attired the attention of someone from the revenue agency and after that they reviewed the fact and concluded that since he was playing for a living it was a business. The main point here is that a tribunal decision would be very interesting for most of us.

Also for the non-residency. I'm in the process of leaving Canada to not take any chances since I like to live oversea anyway. I consulted a lawyer about it and its more than just severing your ties with the canada. He said to me that you also need a fiscal residence in another country. PM if you want more details. You also need to stop your canadian free medical insurance.

Henry17 · #**177** 09-12-2007, 06:55 PM

Why would the tribunal decision be interesting?

The law is not complicated. Morden sets out very specific criteria that will be considered. Since it is almost certain that the article quotes your friend in such a way as to make it clear he does this as a business the tribunal would be pretty much a waste of time.

SlightlyMad · #**178** 09-12-2007, 07:33 PM

Raven, I have to admit that that sucks for your friend.

I would like to pile on to Henry's original comment. It would be of benefit for all of us if you could track down the newspaper article so that we could see how your friend outed himself.

Henry17 · #**179** 09-12-2007, 08:11 PM

Basically if he admitted to:

1. Gambling for the purposes of making a living rather then just for entertainment.

2. Special knowledge or skill? Poker and sports wagering is different then house games. Anyone who claims they are a good roulette player is delusional. While both poker and sports handicapping are skills.

3. Being professional about it? Keeping stats and being organized. Travelling on a circuit or for some distance for softer / bigger games. Taking courses or reading books to improve. These are not as critical as #1 and #2 but they are considered.

4. Frequency. If he admitted to playing a lot then while not as bad as #1 it adds a lot to tipping the scale toward you must pay tax.

If he admitted to these things in his interview then it is pretty much a done deal. He'd be reduced to either claiming that the reporter misunderstood or that he lied to the reporter. Then the onus would be on him to prove that he has funds from some other source that explains the quality of life assessment they have done on him.

Raven · #**180** 09-12-2007, 09:21 PM

Well it would be the first judgment about an online poker players about taxes. I think, as most of you that poker is probably taxable on the basis of the interpretation of the tax law, but i would like to see a real decision about it. Also, one of my friend who have consulted a lawyer told me that he had some good arguments about it not to be taxable.