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What US Tax Court case has addressed this issue about tax deductions for business expenses for...

What US Tax Court case has addressed this issue about tax deductions for business expenses for those engaged in the sale of legalized marijuana for personal and/or medical purposes?

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Answer #1

The Tax Court in the Claim of deductions for Ordinary and Required Business Expenses was disallowed which was claimed by the California Medical-Marijuana Dispensary.

As per Code Sec 162 (a) all The Expenses Paid or Incurred in the Tax Year for running trade or business can be deducted from the Gross Income . However As per Code Sec 280E No Deduction will be allowed for the expenses if the business involves trafficking in controlled substances.  Nonetheless, several state legislatures have passed laws legalizing the cultivation and sale of marijuana.

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