Up in Smoke

[veritas]

the name of a Cheech and Chong movie from the seventies.

Also what happens for legal marijuana growers deductions.

Olive, 139 T.C. No. 2, August 2, 2012

[David1980]

http://www.ustaxcourt.gov/InOpHistoric/olivediv.TC.WPD.pdf

Basically legal or illegal under state law it doesn't matter. You get cost of goods sold. We've had a lot of dispensaries/growers in Washington over the last few years and I've turned down several of these. If I did the return they wouldn't like the result without all their deductions. Realistically they're probably better off filing it without mentioning marijuana and hoping they don't get audited, but I'm not going to tell anyone that or do the returns.