Post deleted by Mat Sklansky

[King_Striker]

[The Dude]

Why are you asking? Is it curiosity, or is it because you intend to make a lot of money playing poker and want to know the best way to avoid paying taxes on it?

[King_Striker]

[jman220]

Based on the quality and content of your posts on these boards so far, I am quite confident that you will never have to worry about paying taxes on poker winnings.

[Python49]

lmao

[The Dude]

My desire to spend a decent amount of time and energy giving a full response will depend on why you're asking. I don't feel like going through the trouble only to satisfy someone's curiosity, but if you genuinely think that you need the advice, I'd take the time to answer your questions and connect you with the people to take care of the paperwork side of things. That is why I asked.

[sdc]

Dude

I would like to know how to avoid paying taxes on poker income please explain....
What amount or maybe what % of income would be enough to start attracting attention?
Thanks

[King_Striker]

[The Dude]

To the best of my understanding, in Canada non-professional gamblers are not taxed on their winnings.

[The Dude]

sdc,

I'm not sure what you mean when you ask how much will start to attract attention. The liklihood of you getting audited are extremely slim, and assuming you have a regular job it is very easy to completely leave poker winnings off your tax report - therefore you pay zero taxes. This is illegal and something I do not condone, but I think only a very small percentage of winning poker players report anywhere close to their real earnings to the IRS.

While everybody's situation is different, I would say that if you're making $10,000/ yr or more it is definately worth the time and money to consult a tax professional who is knowledgable about the tax laws concerning gambling income. I can give a good reference to anybody who is interested, and am willing to have more discussion with anybody who wants to PM me.

[jrz1972]

[ QUOTE ]
I am not making money playing Poker

[/ QUOTE ]

We didn't really need to have that spelled out for us, but thanks anyway.

[PhatMango]

You may find this useful:

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

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


Also here is the law (unsuccessfully applied) in action:

http://www.canlii.org/ca/cas/tcc/2003/2003tcc707.html

[lozen]

This is a grey are in the CDN tax system. In the last 7 years there have been about 8 cases that have gone forward to the courts revenue canada has one only one or two. Right now the guys in Ontario that just play sport select and are soley responsible for the limit on amount bet per location arebefore the courts. All they do is sports bet and they look like they will beat the charge. If someone plays the lottery every week and than hits 10 million and is not taxed how can you tax someone that wins $50,000 a year. Thats the point they keep loosing out on.

[King_Striker]

[jman220]

For an appropriate response to this post, please see link.

LINK (http://forumserver.twoplustwo.com/showflat.php?Cat=&Number=2749122&page=0&view=colla psed&sb=5&o=14&fpart=1)

[jman220]

[ QUOTE ]
[ QUOTE ]

We didn't really need to have that spelled out for us, but thanks anyway.

[/ QUOTE ]
*WE*? What the hell is wrong with you? Are you a schizopherniac?

[/ QUOTE ]

He speaks for I believe the majority of us on the forum, hence the "We."

[King_Striker]

[jman220]

Nope. LINK (http://forumserver.twoplustwo.com/showflat.php?Cat=&Number=2749122&page=0&view=colla psed&sb=5&o=14&fpart=1)

[mjm]

Move to the UK. All gambling winnings whether as a hobby or profession are tax free.

[King_Striker]

[Georgia Avenue]

Hey King:

Maybe this will help?

Important Information (http://forumserver.twoplustwo.com/showflat.php?Cat=&Number=2749122&page=0&view=colla psed&sb=5&o=14&fpart=1)

[mjm]

yeah, lucky if I could win lol.

[Mike Cuneo]

[ QUOTE ]

Also, you'd have to risk thouands of dollars playing poker, how can anyone afford to give 40% of it to the goverment?

[/ QUOTE ]

Play you heads up

[michiganlaw]

The legal advice given thus far is wholly inaccurate. Under the Internal Revenue Code, gambling is clearly defined as "taxable income." However, the trick is that all gambling losses can be deducted against all gambling winnings. This is known as the "basketing approach," (i.e. you can only deduct gambling gains against gambling losses...you cannot deduct other income gains with gambling losses).

Thus, as lawyers, we are trained to find a way around the system...how do poker players really verify that they had certain losses to deduct against corresponding gains? B&M casinos don't exactly give you a receipt everytime you cash in for chips, so how do you have any proof that you actually "lost" money to be able to take a hefty deduction?

My advice...go to your local horse racing facility and scoop up all the losing "tickets" you can get your hands on. All of these tickets are evidence of gambling losses, and fortunately for you, there is no name on the horse race ticket, so if you're in possession of the ticket the I.R.S. will presume it was your ticket that was a losing wager.

Moral of the story: all you "winning" poker players who actually report their income to the I.R.S. now have a brilliant way to offset those increases in taxable income!

[The Dude]

First you say...
[ QUOTE ]
The legal advice given thus far is wholly inaccurate.

[/ QUOTE ]
Then you procede to advise people to break the law. Hmm.

[mjm]

All very well except

1)You're breaking the law.

2)You're still going to have to declare reasonable winnings if you are a pro to justify your standard of living if you ever get investigated.

Ultimately it sounds similar to any other cash in hand business, you can significantly reduce the tax you pay if you're willing to break the law.

What I find difficult to understand is why the top players continue to live in the U.S.

You can't really hide the fact you've won a WSOP or WPT event and you are going to potentially pay millions in tax.