Blog Archives

More on Marijuana Taxation: Beck v. Commissioner & Accounting for Excise Tax Paid – CCM 201531016

Business Entity Selection and the Tax Consequences of Converting

UGH! I vowed to stop writing about the tax implications of marijuana cultivation and distribution. The catholic guilt of a dysfunctional adolescence must be burning deep today as resisting the urge to come back for yet another round of punishment

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Posted in Business Expense, Marijuana, Tax Court, Tax Deductible Expenses, Tax Guidance & Preparation

Marijuana Dispensary Income Tax Guidance Update: IRS Memo 201504011

Business Entity Selection and the Tax Consequences of Converting

As many of you know who follow my tax musings via this blog, I recently led a team of people that shepherded a Marijuana Dispensary through the IRS Examination and Appeals functions. The dispensary in question was owned and operated

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Posted in Amortization, Business Expense, Cash Transaction, Disallowed Expenses, IRS Appeal, IRS Audit, IRS Enforcement, IRS Examination, Marijuana

The Intersection of ‘Trafficking under IRC 280(E)’ & Cost of Goods Sold (COGS) Relevant to Taxable Income for Marijuana Distributors in Colorado

Business Entity Selection and the Tax Consequences of Converting

As many of you who follow me and/or this tax blog know I have been actively tracking a handful of select medical marijuana dispensaries in Colorado who have been denied the opportunity to deduct ordinary and necessary business expenses by

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Posted in Marijuana

Trafficking under IRC § 280E

Business Entity Selection and the Tax Consequences of Converting

The Internal Revenue Code is a complex beast.  In the lunacy of it all I've been asked to define 'trafficking' as it relates to 26 USC § 280E - Expenditures in connection with the illegal sale of drugs which states as follows: "No

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Posted in Appeals & Audit Resolution, Asset Classification, Business Expense, Cash Transaction, COGS, IRS Mediation, Marijuana, Net Operating Loss, NOL, Tax Abuse, Tax Court, Tax Guidance & Preparation, Tax Problems & Requests

IRS and Medical Marijuana Dispensaries – Olive v. Commissioner

Dispensary owners now finally have some precedent to follow in arriving at federal taxable income. In Olive v. Comm'r, 139 T.C. No. 2 (8/2/12), Mr. Martin Olive the owner of an operation called the Vapor Room was required to prove

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Posted in Marijuana

IRS Implications for Medical Marijuana Dispensaries Update

Business Entity Selection and the Tax Consequences of Converting

I was at the IRS Practitioner Liaison Meeting yesterday morning in downtown Denver where local IRS officials in positions of authority presented operational updates. In regards to medical marijuana dispensaries Matthew Houtsma, acting Associate Area Council spoke. I found his

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Posted in Marijuana

IRS Treatment of Marijuana Dispensary Expenses

If you are in the business of dispensing marijuana according to the United States Office of Homeland Security you are selling an illegal drug not a medicine like many individual states believe. Nevertheless Internal Revenue Code IRC 280(E) states that the expenses

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Posted in Business Expense, Business Income, Cost Segregation, Deductible Expense, Marijuana
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