Canadian tax on poker winnings

[all_in_lam]

I am currently a university student in Canada, but play poker part-time. I also work about half the year for co-op job (800/week) that i obviously file tax for.

my poker income is 5 figures but not anywhere close to 6 figures, do i have to file?

when do i legally have to file?

[DLizzle]

i think there is a big thread on this somewhere, but I don't actually think anyone knows for sure. I'm a student in Canada also and I haven't paid taxes for poker, but I've made inquiries about this before and no one seems to give a direct answer.

[Pog0]

all_in, in your particular case you have a reasonable claim to playing recreationally and being exempt from paying taxes on it. How to go about reporting it (or not reporting it), I don't know. There's a small piece of legislation with regards to taxes on gambling and some criteria are a 'reasonable expectation of profit' operating in a 'systematic' way and probably something about doing it for your 'livelihood'

Anyway, I'm not sure about the link to it, but I'd recommend finding and reading it. It's short and you should have a reasonable case from being free from it.

If only I could say the same thing for myself...

[Overfloater]

I heard there were a few ways around this. I'm very interested in hearing it. I hate taxes im like the robin hood of poker except stealing blinds from the poor degens and not giving anything away

[RaiseAndPray]

I know there have been a couple circumstances in Canada where sports bettors who made a "livelihood" betting sports were NOT forced to pay tax, but went through a pretty thorough court process before that decision was made. I guess that shows some sort of precedence...

I've been playing poker for almost 3 years and have made the vast majority of my earnings doing so. I have been auditted previously for a business I ran, and I know for a fact I will get auditted again within a year or two at most (because I have not been claiming any income for a couple years and have obviously been spending money including a large down-payment on a mortgage).

You're right about vague and uninformative answers when asking questions concerning this topic. That is all I've ever received. It seems no one really knows what will happen, but I know it'll be a sh!tstorm when all the Canadian poker players start getting auditted, and then also when a large number of income tax evaders CLAIM they made their money playing poker (because it is such a popular hobby and many will think it's a way to shrug off some earnings potentially). Revenue Canada will have to weed out the true poker players and the liars, and I'm pretty sure they will not be prepared for this in the least. So, I guess try to have any records available that you can, which are obviously sketchy at best for many including myself, especially for live play.

It'll be interesting to see what happens, and I don't think we'll really have any answers until poker players start getting auditted (which will be soon). I assume one or two higher profile cases will probably set the precedence.

I've searched around and just find squat for solid information. Everything is so vague and circumstantial. If anyone else knows more or has experience with this, myself (and many other Canadians I'm sure), would appreciate more information or references.

[SlightlyMad]

There's a really good thread on this in Internet Gambling.
Canadian Tax Thread in Internet Gambling

[Mossberg]

It's really not as "vague" or "circumstantial" as alot of you would like to believe. From what I've read on the CRA website, I can see clearly that I'm supposed to pay taxes on my winnings. I can't deny that I do things to increase my edge in the game (2p2, books) and that I play with an expectation for profit. Therefore, I'm basically operating like a business - and even though I only made like 20k through poker last year, I will be reporting it.

[TorontoCFE]

The answers you get are vague because of a few reasons:
1. Most people, including many accountants, do not understand the law even though it is clear.
2. There haven't been any big cases go to court yet.
3. The CRA hasn't pushed the issue.

There is no doubt that if you are consistently making money, regardless of time invested, take steps to minimize risk amd are using the money to maintain your lifestyle, then you are indeed taxable.

Many people get confused over the windfall logic, the time invested issue and the threshold where your risk of getting caught reaches an unacceptable level.

Some people do report and pay taxes on poker income. There are steps you can take to minimize potential taxes.

Most people look at it like speeding - cops could pull you over for going 81 in an 80 zone but its not worth their time. If your poker earnings are less than a certain amount, the risk of not reporting is acceptable.
Once you are regularly pulling in decent coin, then it becomes more likely you could run into problems.

I personally can't wait until a poker case hits the courts so some people's eyes open.
-

[RaiseAndPray]

I wish you'd just say "it's all good, don't worry about it". [img]/images/graemlins/smile.gif[/img]

Okay, thanks for the info, I missed that other thread that was referred to, tons of info there (though a few years dated). It definitely will be interesting when the first cases hit the courts, I hope I'm not the one involved. :P

[mariachiinc]

I think the issue here is if they make everyone claim their earnings, they they also have to deduct income for their losses... that's likely very scary for the Canadian Government... lol.