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Posted

Legal in state where the entity does business.  Are there any recordkeepers who will work with these businesses?  I know it's a whole thing I just am curious to know if its doable.

Austin Powers, CPA, QPA, ERPA

Posted

And at least some of the legal thinking seems to be from Jewell Lim Esposito, a respected employee-benefits lawyer.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

Posted

it would be interesting to see how they overcome 280E issues.   Back in the '80s during the height of the war on drugs they passed a law that says you can't deduct any expense related to illegal drug dealing (illegal at the federal level to be clear).   I know courts have said cost of goods sold are an exception to that rule.  

I don't work with these companies so there might be away around the whole thing.    But if you can't deduct your retirement costs that changes the dynamic of the reasons to start one.  It doesn't end the reason to start one but changes it. 

The real answer is to acknowledge the two realities:

1) This particular drug is legal in states so that ought be be enough for an exception

2) Most likely 280E ought be repealed.  Read literally a chop shop can deduct their cost of wages paid to people who steal cars for them but a drug dealer can't deduct wages paid to the people selling their product.  (Yes, I get it we are talking crimes but they have to pay taxes and they are entitled to pay taxes on their net income not their gross revenue unless your crime is drug dealing.  It is a bias not rational.)  

 

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