Tax Treatment of Cannabis Partnerships: Pass-Through Entity Selection Strategies to Minimize Tax
Utilizing 199A QBI Deduction to Mitigate the Gross Income Inclusion and Section 280E Deduction Limitations
Note: CLE credit is not offered on this program
Recording of a 110-minute CPE webinar with Q&A
This course will provide tax advice to partnerships engaged in the cannabis business in states that have legalized its sale and/or cultivation. The panel will discuss the eligibility of pass-through entities claiming the QBI deduction, detail the rules limiting expense deduction under Section 280E, and describe scenarios where a pass-through is the optimal entity selection from a tax and operations standpoint.
Outline
- State landscape for legalization
- Federal income tax issues specific to cannabis businesses
- IRC Section 280E deduction limitations
- Possible application of Section 199A QBI deduction claim for pass-through businesses
- Entity planning strategies
Benefits
The panel will review these and other key issues:
- How the Section 280E rules serve to limit deductions for non-COGS business expenses
- How the Section 199A QBI deduction for pass-through entities may be available to mitigate the tax impact of the 280E deduction limits
- Scenarios where a partnership entity structure for operating a cannabis business may minimize federal income tax
- Potential state tax questions
- Key issues raised in IRS audits and methods to avoid them
Faculty
Jonathan Kalinski
Principal
Hochman Salkin Toscher Perez
Mr. Kalinski specializes in both civil and criminal tax controversies as well as sensitive tax matters including... | Read More
Mr. Kalinski specializes in both civil and criminal tax controversies as well as sensitive tax matters including disclosures of previously undeclared interests in foreign financial accounts and assets and provides tax advice to taxpayers and their advisors throughout the world. He handles both federal and state tax matters involving individuals, corporations, partnerships, limited liability companies, and trusts and estates. Mr. Kalinski has considerable experience handling complex civil tax examinations, administrative appeals, and tax collection matters. Prior to joining the firm, he served as a trial attorney with the IRS Office of Chief Counsel litigating Tax Court cases and advising revenue agents and revenue officers on a variety of complex tax matters.
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Steven Toscher
Principal
Hochman Salkin Toscher Perez
Mr. Toscher has been representing clients for more than 35 years before the Internal Revenue Service, the Tax Divisions... | Read More
Mr. Toscher has been representing clients for more than 35 years before the Internal Revenue Service, the Tax Divisions of the U.S. Department of Justice and the Office of the United States Attorney, numerous state taxing authorities and in federal and state court litigation and appeals. Mr. Toscher enjoys a unique combination of solid criminal defense experience and extensive substantive tax experience to assist individuals and entities subject to sensitive government inquiries. He has considerable experience as lead counsel in defending criminal tax fraud investigations (both administrative and grand jury investigations) as well as in defending criminal tax prosecutions (both jury and non-jury). Mr. Toscher’s tax practice includes a wide array of substantive areas including income taxes, estate taxes, employment taxes, sales taxes and property taxes. He is routinely involved in sensitive issue or complex civil tax examinations and administrative appeals on behalf of wealthy individuals and their closely held entities as well as large corporations involving both domestic and foreign tax related issues.
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