Cra Casino Winnings
Week in winnings over a 48-week period. McArthur, T.C.C.J. Held that where a person uses expertise and skill to earn a livelihood in a gambling game in which skill is a significant component, their gambling winnings are taxable.15 Luprypa remains the only case in Canadian jurisprudence where gambling winnings were held to be. CRA’s office at PSA Building will be opened from 2 June 2020. To minimise your time spent in public space, please contact us via our online feedback form or call us at 6501-7000. Visits to CRA’s office are by appointment only.
A Toronto man trying to write off casino and racetrack losses against his income tax bill has gambled and lost at Canada's Federal Court of Appeal.
Giuseppe Tarascio claims that gambling is how he earns the bulk of his income. He filed tax returns for several years, claiming both his wins and losses.
By day, Tarascio is a technician with Bell Canada. But on evenings and weekends, he responds to what he claims is his true calling: horses, slot machines, casino games and lotteries.
He claims to have won tens of thousands of dollars. For years he claimed those winnings as income, but he also deducted his losses and expenses.
In his income tax returns for 2002 and 2003, he deducted from his gambling winnings his losses and associated expenses: $40,933 in 2002 and $56,000 in 2003.
But Tarascio’s luck ran out when the Canada Revenue Agency (CRA) stepped in and disallowed those deductions.
Tarascio objected and went to tax court. He presented his books and records, but lost there too.
No 'systematic method,' court rules
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Hoping his courtroom losing streak would end, Tarascio pushed his luck further, taking his case to the Court of Appeal.
He claimed that his degree in mathematics — coupled with his experience in probability theory — gave him the expertise to register his gambling as a business.
Cra Gambling Winnings
But the court turned him down, saying Tarascio had no 'systematic method' for gambling and had spent no time practising his skills. He was also required to pay court costs of $1,000.
It didn't help that Tarascio admitted that win or lose, it was really the thrill that drove him to the tables.
Colin Campbell, who teaches tax law at the University of Western Ontario, said the test of whether or not gambling losses are a legitimate writeoff depends on whether it’s a personal or commercial activity.
'That's the dividing line,' said Campbell. 'And in the case of gambling, the courts have generally found that gambling is predominately a personal activity.'
Tarascio didn't want to talk about the decision when contacted by CBC News.
Asked if he planned to appeal to the Supreme Court, he said no. That would require a lawyer, but Tarascio said he can’t afford one.
Summary
This Chapter discusses the tax treatment of various receipts, such as strike pay, gambling winnings, and forfeited deposits, which do not readily come within any of the more usual categories of income. Prizes from lottery schemes, pool system betting, and giveaway contests are also considered. The Chapter indicates whether and under what circumstances a particular type of receipt is to be included in calculating income for tax purposes.
This Chapter also discusses the income tax treatment of gains and losses of both a capital and non-capital nature resulting from theft or embezzlement from a business by strangers, employees, proprietors, and others.
The Canada Revenue Agency (CRA) issues income tax folios to provide a summary of technical interpretations and positions regarding certain provisions contained in income tax law. Due to their technical nature, folios are used primarily by tax specialists and other individuals who have an interest in tax matters. While each paragraph in a chapter of a folio may relate to provisions of the law in force at the time it was written (see the Application section), the information provided is not a substitute for the law. The reader should, therefore, consider the Chapter’s information in light of the relevant provisions of the law in force for the particular tax year being considered.
The CRA may have published additional guidance and detailed filing instructions on matters discussed in this Chapter. See the CRA Forms and publications web page for this information and other topics that may be of interest.