Tax question for my Canadian friends

Marauders · Jun 16, 2006

I am sure the tax question from online gambling have been thoroughly discussed before, but most of them are pertained to the US tax laws. I want to ask specifically for my fellow friends in Canada, what is the tax system with regards to online sports/poker winnings?

One friend told me that any gambling winnings that is the result of luck is not taxable, i.e. lottery. But if you consistently pull in profit from poker or sports betting, you are not being lucky, and those income will be taxed. Others have told me that as long as you have a full time job, then you don't have to worry about paying tax for all the other stuff. Which guy is correct?

So I guess my question is, if I have a full time job, but makes about 10-15K a year on the side playing poker and sports betting, should I just pay the tax on it, or that CRA really don't go out of its way to go after online gamblers, and I should be fine. I have no problem with paying the taxes, it's just that the law is so vague, I want to clear it up with somebody who have experience in this matter.

Any comments are welcome.
:howdy:
Thankyou

Marauders

Woody0 · Jun 16, 2006

Marauders said:
So I guess my question is, if I have a full time job, but makes about 10-15K a year on the side playing poker and sports betting, should I just pay the tax on it,

Your occupation is not professional gambler. It appears your choice of entertainment is profitable. No declaration on entertainment expenses/profit and so no taxation.

Don't give up your day job.

kobefan08 · Jun 16, 2006

Woody0 said:
Your occupation is not professional gambler. It appears your choice of entertainment is profitable. No declaration on entertainment expenses/profit and so no taxation.

Don't give up your day job.

what if you were in university and made shitloads gambling.. ur main occupation is still a student though, how would they classify that?

BAUS · Jun 16, 2006

Marauders, I would say both your friends are correct. If your main source of income is derived from gambling, then it's taxable.

In the case of a person who makes the same amount every paycheck, month after month, it's highly unlikely they will be audited. So I wouldn't declare any winnings.

Kobefan, that student's main occupation may be "student", but his main source of income is gambling. So it would probably be considered taxable.

BAUS

kobefan08 · Jun 16, 2006

thanks for the awnser baus.. appreciated

Woody0 · Jun 16, 2006

kobefan08 said:
what if you were in university and made shitloads gambling.. ur main occupation is still a student though, how would they classify that?

Still no tax. If a student or anyone else wins the 6/49 for mega-millions there is no tax.

kobefan08 · Jun 16, 2006

Woody0 said:
Still no tax. If a student or anyone else wins the 6/49 for mega-millions there is no tax.

amazing...didnt know that... thanks

WildBill · Jun 16, 2006

Hard to say though if he is playing poker consistently for profit. Everyone knows lotto is pure luck and no tax agent would argue you did that for profit, but what if he plays the poker circuit for the summer and ends up with tens of thousands in profit? He might be considered a pro.

Woody0 · Jun 16, 2006

WildBill said:
but what if he plays the poker circuit for the summer and ends up with tens of thousands in profit? He might be considered a pro.

If you have an occupation or are retired I don't think there is any problem with a part time hobby. I don't think the chance/skill issue is even relevant to CCRA.

Marauders · Jun 16, 2006

Thanks for everyone for their reply, especially Woody and Baus.

I came upon a thread at 2 + 2 (link below) that talks about Canadians paying taxes for poker winnings. For those who do not want to read the whole thing, it could be summarized as such that anyone who genuinely make an attempt at making a profit at poker are required to pay tax on their winnings. Of course this is still a grey area as nobody tries to lose when they play. This is why this topic is so confusing for me. On one hand I consider myself a recreational player (no tax) but I do genuinely try to make money playing poker (tax). :icon_conf

http://forumserver.twoplustwo.com/showflat.php?Cat=0&Number=1095183&page=0&fpart=1&vc=1

Marauders

tooran · Jun 16, 2006

Also a good idea to keep proof of gambling losses, if possible. You can't be taxed on a big win (well, you can, but you can recover those taxes later) if you can prove you lost as much as or more than you won over the year gambling. Keep your ATM receipts, losing tickets, etc., to offset proven winnings in case the CRA or IRS gives you a hard time later.