[WJL]

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Temp made one. I'll make another...

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Money placed in an online site is sort of like money placed in stocks; at the end of the year, you count what you cashed out as income, what you put in as investments, and pay tax at standard rates on the difference. Rake could well be deductible as a business expense. It may even be handled as capital gains rather than straight income.

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No offense to your accountant, but if he really operates this way he is insane and you do need a new accountant.

By using his logic, I could buy a hooker and tell the government that it was sorta like a stock investment. On the off chance I would knock her up I could later use the benefits of having a child for tax savings. Well, technically, I would be renting the hooker which would open up even more possibilities re. to whether I could capitalize the payment.

The IRS doesn't go for words like 'sorta'. Depositing on a web site is not like investing in stocks and rake has nothing to do with business expenses. And certainly cannot be handled as a capital gains.

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Let me say here that I am not in the business of financial counseling, and some of what I wrote was conjecture. However, I think poker is a lot more like stock transactions than you think.

Poker sites are much like brokerage houses in that they mediate transactions between individuals. The sites take a percentage of these transactions as rake, same as a brokerage house does. Options trading in particular is very much like what we do on a poker site. Now, if brokerage transaction fees can be deducted as business expenses, and I'm not sure they can be, but if they can, it stands to reason that the rake at a poker site is the very same thing.

The real point I was trying to make is that the problem of taxation of poker profits can be minimized by good tax accounting, and that the upside of legitimacy more than pays for these expenses. Once more money comes into the system, power to control how these issue will be handled will follow.