Taxes on winnings?
Something I have always wondered about and I think this would be a good place to ask.
Do online (or live) poker winnings get taxed? and if so how much?
Generally I just pull in about 100 a month from Ultimatebet or tigergaming and I can transfer the full amount to my account via neteller.
But what about big winnings? (Couple thousand or more)
Just curious. Thanks
Do online (or live) poker winnings get taxed? and if so how much?
Generally I just pull in about 100 a month from Ultimatebet or tigergaming and I can transfer the full amount to my account via neteller.
But what about big winnings? (Couple thousand or more)
Just curious. Thanks
Comments
I suggest you find a good tax accountant if you decide to claim your poker income. I have suggested this refferal to others in the past ...
http://www.cga-ontario.org/newfiles/public/accountant/referral.htm
They will be able to hook you up with someone in your area who will be more than relaible.
Jamie.
The example of this would be the 649 lottery. If you win you get it all, not like in the USA.
The current Liberal provincial governmet thought about taxing the casinos and lotteries but backed off.
Just my two cents.
I'm good with that.
I think the grey area is if it is your 'business' to play poker, i.e. your only source of employment, it may be taxable? Just a thought.
Guess I better get to the casino to get an issue of CPP. Maybe I should have taken that free CPP membership. lol
Considering that article was trying to make pokerroom look like the biggest site on the internet (how could they not even mention partypoker in passing?) makes be take anything contained in that article with a grain of salt.
Here's a question ... do you consider your poker winnings a "WINFALL"? If winnings are happening often the goverment probably won't consider them a "WINFALL" but a source of income from a professional doing business.
Please refer to:
http://www.cra-arc.gc.ca/E/pub/tp/it334r2/it334r2-e.html
from which I quote(my bold):
"Gambling Profits
10. Profits derived from bookmaking or from the operation of any gambling establishment (carried on legally or otherwise) constitute income from a business. In addition, an individual may be subject to tax on income derived from gambling itself, if the gambling activities constitute carrying on the business of gambling; see the decision of MNR v. Morden, (1961) CTC 484, 61 DTC 1266 (Ex. Ct.). The issue of whether or not an individual's activities are such that he or she can be considered to be carrying on a gambling business is a question of fact that can be determined only by an examination of all of the circumstances and the taxpayer's entire course of conduct. Although no one factor may be conclusive, the following criteria should be considered in making the determination:
(a) the degree of organization that is present in the pursuit of this activity by the taxpayer,
(b) the existence of special knowledge or inside information that enables the taxpayer to reduce the element of chance,
(c) the taxpayer's intention to gamble for pleasure as compared with any intention to gamble for profit as a means of gaining a livelihood, and
(d) the extent of the taxpayer's gambling activities, including the number and frequency of bets.
It is clear from various decisions of the courts that earnings from illegal operations or illicit businesses, such as illegal gambling and fraudulent business schemes, are not exempt from tax. (See for example, the decisions in The Queen v. Poynton, (1972) CTC 411, 72 DTC 6329 (Ont. C.A.) and MNR v. Eldridge, (1964) CTC 545, 64 DTC 5338 (Ex. Ct.).) Hobbies
Hmm scary
11. In order for any activity or pursuit to be regarded as a source of income, there must be a reasonable expectation of profit. Where such an expectation does not exist (as is the case with most hobbies), neither amounts received nor expenses incurred are included in the income computation for tax purposes and any excess of expenses over receipts is a personal or living expense, the deduction of which is denied by paragraph 18(1)(h). On the other hand, if the hobby or pastime results in receipts of revenue in excess of expenses, that fact is a strong indication that the hobby is a venture with an expectation of profit; if so, the net income may be taxable as income from a business. "
One way to protect yourself while this is a grey area and if it eventually becomes more clear, is to document all of your LOSSES as much as possible. If a determination is made at some later point that you should pay taxes on your winnings to be determined, then the losses would offset some or all of your winnings resulting in a reduced or eliminated tax hit.
Again, call a tax professional regarding these issue if you are considering claiming your poker profits. A tax professional will be the best people to help with this issue. I posted a link on this thread already.