All kidding aside, is there is anyway to write off some or all of
online poker loses. While we understand tax laws state an individual
can only write off losses to the extent of gambling profits made in
the same year, the funds used where from an LLC and for business
purposes, here's the background ...
 
We created a general purpose LLC company and used some of the funds to
startup a financial investments subsidary to manage high risk
investments portfolios. A portion these was used to see if playing
online poker could be a viable investment opportunity. There was
extensive research conducted along with actual play to test various
strategies. One of the results of this effort will be a book on the
subject. All of these activities were or will be conducted as business
ventures under our LLC.
 
The research and application phases of these efforts are now complete.
Is there anyway to structure a tax write-off for the money spent
researching and playing online poker as a possible investment strategy
and the upcoming book to be written  on the subject.
 
Thx. in advance. P.S. While we've only offered $20 for the answer, if
the answer is one that the IRS will allow, we will provide the
maximum bonus allowed to bring final payment to $200.

Why are there any losses if your online poker playing worked?  You did
say that a book was going to be written which implies that you have a
winning approach, doesn't it? Why buy the book if the reader can't
win?

I don't have time to check with my accountant- but I will eventually
since I find the question intriguing.  What i did do was got on to the
IRS.gov site and called the Tax Advocacy line 1-800-829-4933.  After
several auto responses i spoke to a live operator who sent me to the
"Special Case" unit where i will leave your questions with them and
they will return my call to answer the question between now and up to
5 days.  I will keep you posted on what they say.  My gut feel as an
answer to your question is more a matter of getting an agressive CPA
to work with your company.  As an entrepreneur myself- I have seen
that many of the IRS rules are breakable or at least bendable- even
under the scrutiny of an audit- as long as you know what to say in the
audit- and you are willing to have a deduction diallowed if you lose
the argument with them.

Thx. dancingbear for you intest and willingness to help research this
question! We'll be very interested in what you find out.

Just4fun2, without going into great detail, what we found was applying
sound money management principles tailored to this type of activity,
when applied in conjuction to sound playing strategies, combined with
researching/rating players prior to actual play generates consistent
profits. While we are in the black for funds invested in 2005, we took
loses in 2004 to come to this final strategy now being applied. Hope
that answers your questions.

Well just wondering- here is your answer- and for once- I beleive it
is very definitive.

Accoding to the IRS tax advocate I just spoke with - 
You can only deduct your losses against your winnings-period.
The tax code to refer to is section 165 (pertaining to losses)
subsection D (pertaining to gambling losses).
When I explained your scenario he said it doesn't matter what
sturcture existed behind nor the reason for the losses- you can only
deduct them against your winnings in that tax year.  He said the
courts have been very clear about this- and that there has been a lot
of activity on this topic in the past couple of years- the courts
always refer to "165-D" - even if you are trying to claim your losses
a part of a legitimate business expense.  So - there you have it.  If
this answer is satisfactory for you- since i am not an official google
researcher- Maybe you could donate your $20 to a gamblers anonymous
group- or your local animal shelter ;-)  Let me know if you want to
know anything else.
Thanks and good luck- The Dancing Bear

Thx, Dancing Bear. Your answer corresponds to what we've found out as
well. Glad to donate the $20. Our wifes support children's funds so
that where it will go. Take care and thanks again for looking into
this.

JustWondering