Dispensers of Medical Marijuana Set Up For a "High" Tax Bill
When it comes to reporting business income on a tax return, utilizing all applicable deductions to help offset tax is always advantageous. But what happens if a person's business income involves selling controlled substances such as marijuana? The rules of the game are completely different. A person who sells a controlled substance is required to report that income on his tax return, but yet is not allowed to deduct any of the costs, even if it is sold for medicinal purposes. Therefore, if a dispenser of medical marijuana follows all of the rules, he is set up for a high tax bill. This holds true even if living in a state where it is legal to sell marijuana for medicinal purposes...still can't deduct it. Similarly, a person who purchases medical marijuana for medical reasons cannot deduct it as a medical expense, even if doctor prescribed...yes, it appears the IRS is just against marijuana regardless of its use or legality in its state. Take a look at my blog for more on this issue.