Howto:Being Medically Legal and Paying Taxes

[dongle69]

You can pay yourself a good wage and not have profit.

 

[Blowstrees]

Hey Dongle

Thanks for the response. So that would be like taxes as an NPO....paying myself a salary? But woudn't me paying myself a salary be charging for my service?? And the definition of an NPO is a company who instead of divying profit at the end of the year, it gets reinvested into the company..is that correct?

Im not trying to discredit what your saying by anymeans so please excuse my ignorance on the subject of taxes...just merely trying to understand.

Our state has recently "pretty much" passed the new bill above which allows the starting of a dispensary. I say "pretty much" because its not officially law yet as its on the way to the gov's desk..which he might veto but there are more than enough votes to override the veto.. so its really just a matter of time...and not much of it it seems. Im trying to educate myself a bit more on it..being as legal as possible that is...and if I have the opportunity to provide good meds, pay taxes and make an honest living...doesnt sound bad at all

Thanks again.

 

[dongle69]

I'm not talking about an npo or operating a dispensary.
I couldn't help you with those, although that may be your meal ticket.
As for what I read of that bill, it doesn't allow for much (12 plants and 2.5 oz), so you will be hard pressed to make a living from that, even as a caregiver with 5 patients.
That is strange because a plant is an easy .5 oz so I guess you can't ever harvest your plants or you would be beyond the limits of the bill.
Aside from that, the language of money is vague:

A primary caregiver may receive reimbursement for costs associated with assisting a registered qualifying patient's medical use of marijuana. Compensation shall not constitute sale of controlled substances.

They don't define "controlled substance" or "reimbursement costs."

You are going to have to wait for the final language and ask for definitions of the above.

 

[Blowstrees]

Right I hear you Dongle. Thanks again for your response.

It's 12 plants/ 2.5 O's PER patient of USEABLE (which useable is also undefined really, I say my smoke isnt ready to be used until 3 months of curing?? what do you think? lol) herbal with a max of 24 plants/ 5 ounces in your posession. Thats 5 ounces at any given time..the garden runs perpetually to stagger harvests...and I could only trim up and pull down enough meds at a time to be within limits...dispense to patients or possibly the new dispensary...a quarter pound or 5 ounces at a time. I think its pretty feasable....and even at a price of 250-300 per ounce which is low...would still be able to recoupe $1200-$1500 per week which I figure isnt that bad of a living... you could never care for 5 patients with 5 O's flat lol.

The reason I mentioned the NPO type thing was because I thought that would be the only way to pay yourself a salary and not profit? Like I said though...my tax knowledge is quite limited lol.

"Controlled substance" definition I imagine they thought was common sense by what the bill is pertaining too. And it was reimburstment for costs...which would be "costs" period associated with the production of growing the meds i would assume.

 

[Hammerhead]

I'm not sure how many states have laws that prohibit Dispensary's. Here in Oregon we can not sale cannabis and dispensary's are illegal. We can have coop's but only give or trade cannabis with other legal patients. Any exchange of money for any reason related to cannabis is illegal.

 

[Ocean Grown]

Can you claim medical marijuana as a health expense?

If you get receipts from the club that you buy from you can.
I think it has to be over $300/500 - I don't remember the exact amount.

Per purchase or in total?

It was total...BUT...
I just saw in my tax info that it changed this recent tax year.
As of now:

If you itemize your deductions rather than claiming the standard deduction, you can deduct medical expenses. However, they must add up to more than 7.5% of your AGI (adjusted gross income) to be deductible.
This includes:

• medical insurance, including Medicare B and Medicare D premiums
• prescription drugs (insert weed here) <----DANGER WILL ROBINSON, DANGER!
• medical procedures
• mileage to and from medical facilities (every little bit helps!)

Quite a change from previous years but some people buy a lot of weed, so it still helps.

Yes, you can claim it. But it's an illegal claim, so the answer is NO. MMJ isn't a prescription or a prescription drug so you cannot deduct it.

Jeff, you really need to get facts from a tax atty if you don't like jail.
You cannot deduct MMJ as a PRESCRIPTION MEDICINE. It isn't one. Sure you might skate on bye... or end up being audited.

Be careful with any legal advice you get in a forum, even mine.

 

[dongle69]

You are right that you cannot deduct it.

Even though medical marijuana falls under the definition of a prescription drug in IRS publication 502, it also falls under the definition of a controlled substance in the same document, which makes it non deductible on a federal level.
I'll go back and edit the posts.

Jeff, you really need to get facts from a tax atty if you don't like jail.

Fortunately you don't go to jail for having a non deductible expense on your taxes.
You just don't get the deduction.

 

[Greensub]

This has been an informative thread with a lot of good information. I found a place online I wanted to ask about here. They're called CAMMJA;

http://www.cammja.org/index.php?option=com_content&view=article&id=3&Itemid=2

the site talks about becoming a collective cultivation specialist. and helping you become legal. Anyone have any info on them?

thanks,

 

[Blue Dot]

This has been an informative thread with a lot of good information. I found a place online I wanted to ask about here. They're called CAMMJA;

http://www.cammja.org/index.php?option=com_content&view=article&id=3&Itemid=2

the site talks about becoming a collective cultivation specialist. and helping you become legal. Anyone have any info on them?

thanks,

Here's a screen grab from their site:

^I think this pretty much includes all 600 dispensaries in the LA area, at least the ones that I've been in.

 

[Greensub]

Ya... did you read the rest of it? they talk about non-profits, and the AG guidelines...

that's for a collective/dispensary...

then,

for growers...

they also offer classes in legal and growing topics... I guess my question after reading the thread is does a grower operate as an independent contractor/supplier or being part of the collective are you an employee of sorts. When I've gotten 1099's in the past I was an independent contractor.

Providing an itemized invoice invoice of electricity,nutes,supplies, and time to someone who is 1099ing you seems wrong to me, that's info to give an employer for compensation. You would get paid for your time and reimbursed for expenses, they would W-2 at the end of the year.

A 1099 for an amount of product supplied wholesale makes more sense, then you're an Independent contractor/business, your expenses are deducted on your taxes (not supplied to the collective/co-op for them to deduct as expenses on their taxes)

Question: can separate non-profit entities/businesses (independent growers/dispensaries) be part of a larger collective of non-profit organizations (collectives/co-ops) and still handle their books and taxes as a independent?

 

[FreedomFGHTR]

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Question: can separate non-profit entities/businesses (independent growers/dispensaries) be part of a larger collective of non-profit organizations (collectives/co-ops) and still handle their books and taxes as a independent?

Well the way the law is written is that members of a collective can provide their meds to other members of the collective. The dispensary serves as the medium of exchange for the collective.

Last time I checked the IRS and the state of California expect everyone to file their taxes regardless of their associations with other entities.

OH and the CAMMJA thing about guidelines to remove dispensaries from cities is misleading. First off there is nothing that says you can only serve patients in your county. The resrtiction is for out of state patients. Plus the other things they mention such as walk in display isn't prohibited either. Also there are no provisions in the law for how medicine should be kept. Infact the one about vendors is also bogus, because simply all one has to do to legally sell to a coop or collective is be a member.

They aren't as informed as they make it sound.

Be careful with any legal advice you get in a forum, even mine.

That is the best advice I have seen given on this forum ever.

 

[Greensub]

Well the way the law is written is that members of a collective can provide their meds to other members of the collective. The dispensary serves as the medium of exchange for the collective.

Last time I checked the IRS and the state of California expect everyone to file their taxes regardless of their associations with other entities.

OH and the CAMMJA thing about guidelines to remove dispensaries from cities is misleading. First off there is nothing that says you can only serve patients in your county. The resrtiction is for out of state patients. Plus the other things they mention such as walk in display isn't prohibited either. Also there are no provisions in the law for how medicine should be kept. Infact the one about vendors is also bogus, because simply all one has to do to legally sell to a coop or collective is be a member.

They aren't as informed as they make it sound.


That is the best advice I have seen given on this forum ever.

What I was mainly wondering there is the "sell" part... If you're part of the collective you're not "selling it" technically, I could see problems legally with doing your books to reflect that.

The way you've described doing it (itemized list of expenses plus consultation fee) rather than selling it... I guess you're saying that you're sub-contracting as a consultant but the meds are always the property of the collective as a whole???

The AG guidelines do refer to collectives operating as a business... if growers are getting 1099's and "selling" on paper using a BOE form to not collect sales tax, they are setting up themselves as an independent entity separate from the collective... even if you are a member... what proof do you have on paper to explain why you have more than 6/12 plants, is being set up like this going to fly in court? or are they going to say you're not technically legal under California state law because of the way you keep your books,

Personally I'm planning on Hiring a lawyer and a CPA to make sure I've got everything legal.

 

[bbing]

if growers are getting 1099's and "selling" on paper using a BOE form to not collect sales tax, they are setting up themselves as an independent entity separate from the collective

Thats what im thinking too, thats why a 501.C3 seems like the most versatile way to organize. Salaries top out at at the mid 100k's i thought, and yes you can organize multiple funding streams under the non-profit as long as they satiate the charter req's.

BTW, any of you guys need acting board members for your charter, PM me. hehe

 

[squirrelfooker]

So this was a helpful thread until the OP deleted everything....

 

[Perpetual]

if anyone has the original info posted here that was deleted hit me up

 

[squirrelfooker]

google cache seems to have got it
http://74.125.155.132/search?q=cach...gal+and+Paying+Taxes&cd=1&hl=en&ct=clnk&gl=us

 

[ICMag1]

can someone reup the OP?