Blog Archives

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 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

State Taxation of Marijuana

Robert Mikos (Vanderbilt) has posted Why Crime Doesn't Pay: Thoughts on State Taxation of Marijuana Distribution and Other Federal Crimes on SSRN. Here is the abstract: The financial crisis has breathed new life into proposals to reform marijuana law. Commentators

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Posted in Sales Tax, Uncategorized

Projected Revenue from Marijuana Tax

There has been much commentary on the revenue that could be raised by legalizing and taxing marijuana: American Journal of Economics and Sociology, Potential Tax Revenue From a Regulated Marijuana Market: A Meaningful Revenue Source Business Week, Legalize Marijuana for

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Posted in Tax Guidance & Preparation, Tax Preparer
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