Accounting Methods in an Emerging Cannabis Loophole – Part 1
For cannabis businesses, federal income taxes can be ruinous—even in loss years. Unlike other industries, which pay income taxes only on actual income, cannabis businesses, defined in federal law as drug traffickers, are singled out for an extra tax on a portion of their expenses. As a result, even the best tax planning tends to be complex and unpredictable. Recently, however, planners have become interested in a simple loophole which could eliminate cannabis’s disparate tax treatment entirely.
Making a change in your accounting method is the most exciting technique in cannabis tax planning today, and it yields a large tax savings from a small investment in tax planning. Executing this plan is a simple two-step process, both will be handled by the business’s CPA.
Today’s video discusses how 471c can be applied on a practical basis by using specific accounting procedures.
Abraham Finberg, MBA, CPA
Abraham Finberg is a Managing Partner at AB FinWright LLP who provides outstanding client services to simplify troublesome tax issues and is the go-to tax and accounting expert for business owners in new and emerging industries. He is especially well-versed in cannabis-related tax issues.
Previously, Abraham founded his own full-service accounting firm and served as CEO for over a decade.
Check out this blog post for more details
Subscribe to our YouTube channel for future updates!