Tax
Jun. 15, 2020
Should you change your accounting method? An emerging cannabis loophole
Even the best tax planning tends to be complex and unpredictable. Recently, however, planners have become interested in a simple loophole which could eliminate cannabis’s disparate tax treatment entirely.
For cannabis businesses, federal income taxes can be ruinous — even in loss years. Unlike other industries, which pay income taxes only on actual income, cannabis businesses, defined in federal law as drug traffickers, are singled out for an extra tax on a portion of their expenses. As a result, even the best tax planning tends to be complex and unpredictable. Recently, however, planners have become interested in a simple loophole which could eliminate cannabis’s disp...
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