70% TAX? Marijuana profits up in smoke under IRS rules...

jabo38

legendary

Activity: 1232

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mining is so 2012-2013

Quote from: Gumbork on November 06, 2014, 10:33:37 PM

Quote from: Spendulus on November 04, 2014, 01:38:08 PM

Say gross profit was $100, IRS-allowed expenses were $10, IRS-not-allowed expenses were $50.

IRS would compute tax based on $100-10 = 90. If tax was 30%, $27 in tax.

Actual net profit was $100-10-50 = $40.

Less $27 in tax gives $13 to take home.

If the IRS had done it right, tax on the $40 * 30% = $12 and the take home would be $40-12 = $28.

So yeah, I agree with the total unfairness of this IRS interpretation.

Regardless of how unfair the tax treatment the marijuana tax laws are, it is still very profitable to sell marijuana legally as the margins are the shops are sky high

I agree. And legal win high taxation is way better than illegal so I'll take that for now. Maybe it's not perfect but it's definitely going the right way.

Gumbork

hero member

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Merit: 500

Quote from: Spendulus on November 04, 2014, 01:38:08 PM

Say gross profit was $100, IRS-allowed expenses were $10, IRS-not-allowed expenses were $50.

IRS would compute tax based on $100-10 = 90. If tax was 30%, $27 in tax.

Actual net profit was $100-10-50 = $40.

Less $27 in tax gives $13 to take home.

If the IRS had done it right, tax on the $40 * 30% = $12 and the take home would be $40-12 = $28.

So yeah, I agree with the total unfairness of this IRS interpretation.

Regardless of how unfair the tax treatment the marijuana tax laws are, it is still very profitable to sell marijuana legally as the margins are the shops are sky high

TheButterZone

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RIP Mommy

"The power to tax is the power to destroy" - Chief Justice John Marshall, in McCulloch v. Maryland

Spendulus

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Activity: 2912

Merit: 1386

Say gross profit was $100, IRS-allowed expenses were $10, IRS-not-allowed expenses were $50.

IRS would compute tax based on $100-10 = 90. If tax was 30%, $27 in tax.

Actual net profit was $100-10-50 = $40.

Less $27 in tax gives $13 to take home.

If the IRS had done it right, tax on the $40 * 30% = $12 and the take home would be $40-12 = $28.

So yeah, I agree with the total unfairness of this IRS interpretation.

Wilikon

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Activity: 1176

Merit: 1001

minds.com/Wilikon

http://www.usatoday.com/story/news/nation/2014/11/03/irs-limits-profits-marijuana-businesses/18165033/

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And they thought 0bama and a BIGGER government were going to save them from the evil pro private business politicians Grin

Topic: 70% TAX? Marijuana profits up in smoke under IRS rules... (Read 1023 times)