T4 from PokerStars

[swak]

Im sure Kobe has the answer to this one, but in my mail today i got a T4 from pokerstars! Not much income from them haha... but some nonetheless.

Got me thinking, if i go to the casino, play poker, and regularly walk out with a significant amount of money (ie. income). While it is almost impossible to track, is one obligated to claim this as income when Tax Refund season rolls around?

[Marsh]

Originally posted by swak
Im sure Kobe has the answer to this one, but in my mail today i got a T4 from pokerstars! Not much income from them haha... but some nonetheless.

Got me thinking, if i go to the casino, play poker, and regularly walk out with a significant amount of money (ie. income). While it is almost impossible to track, is one obligated to claim this as income when Tax Refund season rolls around?

Yes technically you are supposed to. Any income gained from sources other than primary income would be capital gains, and therefore taxed. Even if you sold flames tickets for more than you bought them, that technically should be taxed.

[CanmoreOrLess]

Hmmm interesting, as you have a T4, Revenue Canada has this on record. Let's see if the poker community in Canada is now expected to pay taxes on this "income".

It appears they are to pay taxes, so where does this leave those who have lost money online playing poker? Is this a deduction of some sort based on the fact one is attempting to "earn" an income?

First they invaded Kobe's apartment, now they are coming in through the mailbox slot. Capone was the first, it all comes down to paying the gov.

[sexualbanana]

I was under the impression that recreational gambling income isn't taxable in Canada?

The only time you would have to declare your profit would be if it is your sole source of income.

[triplep]

It appears they are to pay taxes, so where does this leave those who have lost money online playing poker? Is this a deduction of some sort based on the fact one is attempting to an income?
[/B]


Yup you can deduct gambling losses.

Gambling Profits are considered business income under the income tax act. I think the major criteria is the amount of time you play.

Since it is business income, you can deduct loses as well. I would even say there is enough reason to deduct a "home office" cost, since if you play online poker and get a T4, then you should be able to deduct home office costs as well.

[swak]

Originally posted by Marsh


Yes technically you are supposed to. Any income gained from sources other than primary income would be capital gains, and therefore taxed. Even if you sold flames tickets for more than you bought them, that technically should be taxed.

Really???

Shit.
So officially, even such an act as mowing a friend of my dads lawn to help him out (also getting paid) this past summer would be declared then as well?
That seems a little over the top doesn't it?

EDIT: Don't get me wrong, i'll pay it, whatever, if it does make sense... Im just not as familiar with this as i'd like to be i guess you can say haha

EDIT2: haha.. i looked more into this, and it turns out its not from Pokerstars, but rather from some other retarded similar website. Drunken pokerstars led to putting monies on this other like site hahaha... (just assumed it was pokerstars under some other alias, due to the fact that i don't put money on anything ever other than pokerstars..... except for this i guess ..google solved that though)

I'd like to know though, if pokerstars actually sends out T4's for their high rollers.

[triplep]

yup its true, even illegal sources of income should be declared as business income....

however, the fact of the matter is that it typically isn't.

thinks like income from prostitution, selling illegal fire arms, selling drugs

technically, all those those people should be claiming it come income tax time... now chances are they aren't but oh well.

[cancer man]

Random gambling is not taxable.(but if it's your primary income yes it is)

[elite]

Originally posted by triplep
yup its true, even illegal sources of income should be declared as business income....

however, the fact of the matter is that it typically isn't.

thinks like income from prostitution, selling illegal fire arms, selling drugs

technically, all those those people should be claiming it come income tax time... now chances are they aren't but oh well.

Al Capone's greatest nemesis. Tax evasion.

[tenth]

Quite a lot of speculative and misinformation in this thread. What it really comes down to for the taxation of gambling in Canada is expectation of profit.

If you're doing it full time or it's your primary source of income, obviously you're expecting to profit. But you could get nailed at a lesser activity level if the CRA wants to be a dick about it.

I'm pretty surprised any poker site is able to provide T4s, given they're provided to employees and not clients. Unless this is for rakeback, which is like a commission? Had been pretty certain you were responsible yourself for tracking amounts won/lost.

[FraserB]

Triplep is incorrect on just about everything he posted.

You can't deduct gambling losses and don't have to claim recreational gambling or lottery winnings of any amount.

[rage2]

How can they provide a T4 if you didn't give them your SIN number? Unless you were that drunk and submitted your SIN number over the internet, which is pretty balsy haha.

[Kobe]

Originally posted by Marsh


Yes technically you are supposed to. Any income gained from sources other than primary income would be capital gains, and therefore taxed. Even if you sold flames tickets for more than you bought them, that technically should be taxed.

This is not the USA




Originally posted by rage2
How can they provide a T4 if you didn't give them your SIN number? Unless you were that drunk and submitted your SIN number over the internet, which is pretty balsy haha.

There is a way of depositing where you give your T4

Interesting however I have never gotten a T4 from pokerstars. (not that I'm aware of anyways)

- If Poker is your primary source and only source of income you are suppose to pay taxes on your earnings, however lets say you make $7/hour working at tim hortons, doing 1 shift a week and make $500,000 in poker you would not have 2 pay the taxes, well you should but you could win in court 100% of the time.


There has not been a case with gambling taxes in Canada since 1950, it is a really large grey area, however I'm sure in the next year or two there will be much larger laws for poker earnings and it will be taxable like in the USA.



http://www.pokerforum.ca/f6/taxation-poker-winnings-canada-27546/



To summarize, to be taxed in Canada on poker winnings, you have to:

1. Play full-time for several years and be profitable making money at similar (and/or increasing) annual levels.

2. Not have any other paying occupation.

3. Be a student of the game and constantly strive to improve through systematically training, taking courses, studying, etc.

4. Hold yourself out to the poker community as a professional. Poker endorsements and writing poker books would be contributing factors.

5. Play not only online but also live.

6. Online, be selective in table selection, finding weak players with large bankrolls and avoid strong players.

There have been no legal cases since the 1950's that have established poker/card players as carrying on a business (and thus be taxable). Because the other side is that losses would be deductible - a slippery slope for the CRA for sure.

I'm guessing Mr. Alarie is a poker player.

[swak]

Originally posted by rage2
How can they provide a T4 if you didn't give them your SIN number? Unless you were that drunk and submitted your SIN number over the internet, which is pretty balsy haha.

Im confused about that myself.

Pokerstars has my sin (well echecks does). So maybe its from them?
I have no idea. I can't see myself out of the blue writing out my sin without thinking about it.

I just brought it to H&R block, and she didn't know what to do with it even haha...
I gotta go back tomorrow though, so hopefully it'll be solved then.

[triplep]

Originally posted by FraserB
Triplep is incorrect on just about everything he posted.

You can't deduct gambling losses and don't have to claim recreational gambling or lottery winnings of any amount.


Um I don't know were you got your information from, but yes if poker is your source of income, then yes you can deduct losses.

http://www.cra-arc.gc.ca/E/pub/tp/it334r2/it334r2-e.html

number 10 stipulates income from gambling and illegal activities. If you are to lazy to check the link, which it seems you would be here is what it says

" 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."

Also if you are to lazy to read the first part it says that these are the receipts you include to calculate income for tax purposes. Which means if you have a LOSE then YES you can write it off.

I also mentioned that it depends on the criteria.

I really hope that you don't do peoples taxes, since I think that they would be missing out on a ton of deductions available to them if you did them.

[Kobe]

http://www.pocketfives.com/articles/canadian-lawmakers-have-bigger-fish-fry-than-online-poker-players-587211/

Article from today

[FraserB]

There has not been a case with gambling taxes in Canada since 1950, it is a really large grey area, however I'm sure in the next year or two there will be much larger laws for poker earnings and it will be taxable like in the USA.


Cliffs: Court rules that gambling losses are not write-offs. Even though the individual professed to be using it as main source of income.

http://www.cbc.ca/news/canada/toronto/story/2012/02/17/gambler-tax-writeoff.html

[sabad66]

lol, are you guys serious? Pokerstars is not issuing any T4s unless you are an actual employee of the company. Clients are clients.. you are not staff.

If you run it like a business and pay taxes that is a whole other story (and again, Pokerstars is not issuing any sort of tax document - you'd have to track it on your own)

[swak]

Originally posted by sabad66
lol, are you guys serious? Pokerstars is not issuing any T4s unless you are an actual employee of the company. Clients are clients.. you are not staff.

If you run it like a business and pay taxes that is a whole other story (and again, Pokerstars is not issuing any sort of tax document - you'd have to track it on your own)

Well what i have is proof that, maybe not a T4 exactly possibly... But something of the like.
When i get my forms back i'll post this one (so you can make it out for your own satisfactions)

[triplep]

Originally posted by FraserB


Cliffs: Court rules that gambling losses are not write-offs. Even though the individual professed to be using it as main source of income.

http://www.cbc.ca/news/canada/toronto/story/2012/02/17/gambler-tax-writeoff.html

Here is another article about the same story http://www.canadapoker.com/canada-revenue-agency-rejects-gambliners-losses-as-a-business-expense/

It gives a way better explanation as to why these losses due to gambling were not allowed.

The BIG thing is that he posted huge NET losses for 5 years straight. That right away is a huge red flag. If he had any experience or skill and if he ran it as a business then he would have had NET gains for at least some of those years.

When you run a business, typically the CRA will allow you upto 3 years in a row of losses, anything after that will be red flagged on their systems and will get investigated. From the article it would seem that the only reason he was doing this was to write of the huge losses he suffered. And honestly, horse racing/slot machine playing is totally different then poker. Also you don't "run" a business if it keeps showing losses from year to year. Hence why his 02, and 03 were pulled. Furthermore the guy was an idiot when he said that "while he liked to win, he gambled, win or lose, because he loved the thrill of gambling and his admission that he spent no time practicing his skills" (read point C from my previous post). Also he did have another job.

Lets use Kobe as an example for poker.... (sorry if I make any untrue assumptions about your poker winnings).

From the sounds of it Kobe plays poker and that is his only source of income, I don't know if he has any special tools or training that help him win, however, he knows enough to understand the odds, and increase his chances of winning (you can't do this in horse racing or slot machines). Furthermore, from the sounds of it Kobe does reasonably well with his gambling. If he was to pay taxes on his winnings as business income then yes he would be allowed to deduct the losses.

Now if Kobe declares net gains lets say for 1999, 2000, 2002 etc, and declares a loss in 2001 and 2003, then yes he would be allowed to declare these losses. The CRA would have a hard time proving that he was not running this as a business as he declared both his gains and losses as a typical business would. And it is expected that businesses will post losses every once in a while.

Now the link you provided is about moron who declared losses for 5 years straight. NO REASONABLE person would keep operating a business if they experienced losses for 5 years straight (especially at the rates this guy was deducting them).

Furthermore, buddy had a huge tax advantage by deducting these huge losses as business income (he was writing it all off against his employment income) ... sure he made "tens of thousands" but he lost "tens of thousands" according to the information provided. From the amount he wrote off as net losses its easy to see that perhaps there was a little bit of tax avoidance on his behalf and he got greedy.

Again, the reason that his losses weren't allowed, was because they deemed it as a HOBBY and not as his primary source of income.

Think about it this way... if he didn't declare his winnings, then he would get to keep them and not pay taxes on them, however he decided to off set those winnings by huge losses and attempt to claim that he was a legitimate business. In the end over 5 years, he basically claimed he didn't have to pay taxes on income of over $286,000. He was basically running a business that lost him that amount.

Hopefully you can understand why the CRA would not allow these gambling losses to be deduct from his taxable income.

If you want to further discuss this FraserB PM me and we can talk about it.

[sabad66]

Originally posted by swak


Really???

Shit.
So officially, even such an act as mowing a friend of my dads lawn to help him out (also getting paid) this past summer would be declared then as well?
That seems a little over the top doesn't it?

EDIT: Don't get me wrong, i'll pay it, whatever, if it does make sense... Im just not as familiar with this as i'd like to be i guess you can say haha

EDIT2: haha.. i looked more into this, and it turns out its not from Pokerstars, but rather from some other retarded similar website. Drunken pokerstars led to putting monies on this other like site hahaha... (just assumed it was pokerstars under some other alias, due to the fact that i don't put money on anything ever other than pokerstars..... except for this i guess ..google solved that though)

I'd like to know though, if pokerstars actually sends out T4's for their high rollers.
Post a picture of this "tax document" (blank out the numbers). I'm really curious now... Again, the definition of a T4 is something like 'statement of employment income'. You were not employed by any poker site, so there is no possible way it is a T4. Is it a revenue Canada document?