Canadian taxes on Gambling winnings

[OneDogg]

a few tidbits i thought you Canadians like me out tehre owuld like to know

The rules

Canadian tax law works so that you'll generally face tax on all sources of income unless specifically exempted under a particular section of our Income Tax Act. The Canada Revenue Agency's Interpretation Bulletin IT-334R2 provides some guidance on how the taxman will view your gambling profits.

The CRA's view is that you may be subject to tax on income derived from gambling, including poker, if your gambling constitutes a business. Now, whether or not your gambling is a business is a question of fact that can only be answered by looking at your circumstances and course of conduct.

While no one factor is conclusive, the CRA looks at the following criteria to make a judgment call: The degree of organization that is present in your pursuit of the activity; the existence of special knowledge or inside information that enables you to reduce the element of chance; your intention to gamble for pleasure versus gambling for profit as a means of earning a living; and the extent of your gambling activities, including the number and frequency of bets.

Poker is the type of game where you can develop special knowledge that enables you to win more often. The more often you play, and particularly where you're playing for profit, and not just for fun, the more likely the taxman will call your winnings business income. In this case, you'll be entitled to deduct any costs associated with playing, including tournament entry and travel costs.

On the flip side, if you're losing more than you're winning, you may have a tough time convincing the CRA your gambling is a business, and so your losses may be denied. Where it's clear that your gambling is for fun and not for profit, your winnings should be tax free.


So basically it isnt etched in stone you will pay taxes on your winnings , if i loose 20k then win 20k that is not what i would call earning a living off of gambling