Where The Gibson Taxpayers Went Wrong

Law360 (August 8, 2018, 4:03 PM EDT) -- Here is a motto worth remembering: The business of cannabis is … business. And, as with any other enterprise, planning matters, implementation matters, safeguards matter.

In a noteworthy decision, the United States Tax Court recently denied income tax deductions claimed by the operators of a medical marijuana dispensary. In Gibson v. Commissioner of Internal Revenue,[1] the United States Tax Court ruled that taxpayers running a medical marijuana dispensary could not deduct those ordinary and necessary business expenses normally associated with the operation of a business. Furthermore, the court ruled that bad record keeping precluded the taxpayers from taking full advantage of...

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