Tax Question for CDN Poker Players

kalozdi1kalozdi1
in General Poker Chat
Hi Guys, Not sure if there are any tax guys or accountants or maybe even some full time players out there that can help me with my questions.

2008 will be the first year my sole source of income has come from poker. Typically, each year I file my taxes by simply submitting my T4 slip and other additional documentation as is routine. Can anyone tell me what I am looking at when I file my taxes for 2008? Do I have to declare my income from poker when filing taxes since I dont have anything else to declare? Can you literally put a 0 for income when filing your taxes? Would it be a good idea for me to get a part time job for the T4 slip since there are still several months left in 2008?

Thanks,

Comments

  • JimmyHoJimmyHo
    I don't think the Canadian 'pros' are paying any tax on their earnings. DG for sure, because he is so high profile. If you are not a recreational player, then the answer is probably yes but proving you are not recreational is the tough part.
  • AcidJoeAcidJoe
    I don't know if the laws have changed in the last few years as this is a few years old but here is how it existing at the beginning of 2006.

    Windfalls

    . Subject to the comments in the current version of IT-213, Prizes From Lottery Schemes, Pool System Betting and Giveaway Contests, and those in 4 and 10 below concerning Voluntary Payments and Gambling Profits, a taxpayer in receipt of an amount which can be described as a "windfall" is not subject to tax on the amount. Factors indicating that a particular receipt is a windfall include the following:


    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

    edit: Don't forget that if you are a pro, any investments made to play poker will be a tax write off. Travel, meals, hotel accomodations etc. that are involved in playing poker would be written off. Now if the majority is online I wonder if that 30 inch lcd would be included, but I would say it would.
  • JimmyHoJimmyHo
    if you only play poker online and keep your winnings and identity low profile, not sure how CRA would be able to find out about your winnings. Lets face it, probably a high percentage of the population doesn't file tax returns anyways. The problem is when you start to play live tournaments and your name starts to get known in public circles.

    The biggest mistake online players make is going 'pro' and letting this fact be known. If you win $2.5MM in a WPT event, etc., don't go around telling every newspaper writer that you quit school to take up poker full-time. This is just more evidence for CRA that you do this for a living and it is no longer a hobby so you have to pay tax on your worldwide winnings. If you win the big one, just act all surprized and say you play poker for fun as a hobby.

    Not sure if any of the pros have actually paid taxes on their winnings so far?
  • actyperactyper
    Why would you think any of the pros are not paying taxes? DG as in Daniel? I'm pretty sure he is definately paying taxes, US though.

    If your income is solely derived from poker, I would definately claim it. Talk to an accountant for sure, but I would definately set it up sort of like a home business.
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