Appeals court affirms disallowance of medical marijuana dispensary’s deductions

Most corporations can claim deductions for “ordinary and necessary expenses” that are “paid or incurred during the taxable year in carrying on any trade or business.” I.R.C. § 162(a). However, otherwise allowed deductions are not available to taxpayers who engage in certain activities that Congress regards as unlawful, I.R.C. § 280E, including trafficking in controlled substances like marijuana.  

 Patients Mutual Assistance Collective Corp., No. 19-73078 (9th Cir. 4/22/21).

"Medical Cannabis Growing Operation in Oakland, California" by Rusty Blazenhoff is licensed under CC BY-NC 2.0

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