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Ep. 128: How to Properly Adhere to 280E to Reduce Tax Liability for Cannabis Companies
Manage episode 377880154 series 3139795
Cannabis businesses who try to get creative to circumvent 280E often find themselves in precarious positions with the IRS. Since companies in the Cannabis industry are not able to legally take tax deductions due to its classification as a Schedule 1 drug, many try to get around 280E by setting up multiple entity structures to attempt to create partitions within their corporations, or use IRC 471 incorrectly, to take deductions like businesses in other industries. Tax courts have ruled against these techniques time and time again.
Minimizing tax liability while being subject to 280E doesn’t need to cause anxiety or fear if done correctly!
On this episode of The Cannabis Accounting Podcast, attorney Nick Richards, partner and co-chair of the Cannabis Law practice group at Greenspoon Marder, LLP, and DOPE CFO Founder Andrew Huzicker, CPA discuss how businesses may benefit from using tax code 471-C when doing their taxes, using Capital Asset Theory to treat costs under 280E as capital assets (under the 16th Amendment of the Constitution), and ways to take expenses at exit (even under 280E).
161 episoder
Manage episode 377880154 series 3139795
Cannabis businesses who try to get creative to circumvent 280E often find themselves in precarious positions with the IRS. Since companies in the Cannabis industry are not able to legally take tax deductions due to its classification as a Schedule 1 drug, many try to get around 280E by setting up multiple entity structures to attempt to create partitions within their corporations, or use IRC 471 incorrectly, to take deductions like businesses in other industries. Tax courts have ruled against these techniques time and time again.
Minimizing tax liability while being subject to 280E doesn’t need to cause anxiety or fear if done correctly!
On this episode of The Cannabis Accounting Podcast, attorney Nick Richards, partner and co-chair of the Cannabis Law practice group at Greenspoon Marder, LLP, and DOPE CFO Founder Andrew Huzicker, CPA discuss how businesses may benefit from using tax code 471-C when doing their taxes, using Capital Asset Theory to treat costs under 280E as capital assets (under the 16th Amendment of the Constitution), and ways to take expenses at exit (even under 280E).
161 episoder
Alle episoder
×1 Ep. 160: Cleanup & 280E Refund Preparation 28:02
1 Ep. 159: Maximizing Opportunities at Cannabis Events 12:38
1 Ep. 158: How Hemp Beverages Are Revolutionizing the Cannabis Market 30:01
1 Ep. 157: From Failure to Finance - How Credit Scores Are Revolutionizing Cannabis Business Lending 24:12
1 Ep. 156: Mastering the Remote Cannabis Accounting Practice: Beyond the CPA Skillset 18:30
1 Ep. 155: Cannabis Tax Insights on Reform and Refunds from 2024 AICPA with Andrew Livingston 1:04:02
1 Ep. 154: How to Charge for Capital-Raising Services 18:48
1 Ep. 153: Navigating Accounting Discrepancies in Cannabis - Compliance, Prevention, and Resolution 16:00
1 Ep. 152: Providing Capital Raising Services to Cannabis Companies 18:22
1 Ep. 151: Compliant Rock Solid Live Inventory Counts 16:01
1 Ep. 150: Building a Powerhouse Accounting Team for Vertically Integrated Cannabis Companies 16:56
1 Ep. 149: Real Estate Strategies for Cannabis Businesses: Navigating Leases, Ownership, and Taxes 15:52
1 Ep. 148: Understanding Financial Modeling for Cannabis Business Success 22:10
1 Ep. 147: Schedule I & III Compliant Inventory Accounting for Cannabis Companies Webinar 39:42
1 Ep. 146: How to Earn More and Work Less an Accountant 35:38
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