Canadian tax ruling on poker winnings
https://ca.yahoo.com/finance/news/suprem...
OTTAWA — The Supreme Court of Canada says it will not review a finding that poker earnings are taxable business income.
The case began when three men appealed the federal revenue agency's declaration that they had to pay tax on poker winnings.
The three acquaintances argued in the Tax Court of Canada that the earnings — which often amounted to hundreds of thousands of dollars annually — were not business income but rather non-taxable income from betting.
Following a joint hearing, a judge concluded their net earnings should be counted as taxable business income.
The judge said in each case, poker was much more than a pleasurable pursuit — it was a livelihood to which the players devoted almost all of their time.
The Federal Court of Appeal dismissed their appeals, prompting the men to seek a hearing at the Supreme Court.
2 Replies
Confused about the ruling. What point do they determine "poker is more than just a pleasurable pursuit", what if someone's a part time live grinder.. do their earnings get taxed? Also how did Jonathan Duhamel WSOP winner not get his winnings taxed.. he was a "poker pro" at the time of his winning, no?
Confused about the ruling. What point do they determine "poker is more than just a pleasurable pursuit", what if someone's a part time live grinder.. do their earnings get taxed? Also how did Jonathan Duhamel WSOP winner not get his winnings taxed.. he was a "poker pro" at the time of his winning, no?
This seems to be a good summary: https://globallawexperts.com/david-rotfl...
Also touches on the Duhamel case, and while it doesn't say it implicitly, it certainly suggests Duhamel basically got lucky and the court made the wrong decision which subsequent courts ruled in a different way.
Various cases have examined the source-of-income principle in relation to gambling, which can be classified into three main categories:
Recreational Gamblers: These cases involve individuals for whom gambling is purely a leisure activity, and their winnings are not considered taxable income, regardless of how often or compulsively they gamble, or whether they employ some form of strategy or system.
Business-Related Gambling: In this category, gambling winnings are deemed taxable because the gambling activities are closely tied to an established business, such as a casino owner gambling in his or her own establishment.
Skill-Based Gambling: This category pertains to gamblers who leverage their expertise to make a living from skill-driven games. For example, a pool player who challenges intoxicated opponents for money falls into this classification, as his or her winnings are considered taxable income.
The rationale in these cases, whether stated directly or implied, utilized the principles of the source-of-income test. The courts acknowledged that gambling inherently involved a personal aspect and determined that winnings would be taxable only if the gambler engaged in the activity with the intent to make a profit. This could occur, for example, if the gambling was connected to an existing business or if the gamblers systematically employed their skills to earn a living from the activity
