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! The $2,185 deducted for security reflects the
cost of security at the main facility, including
the costs of an alarm company and medical service.
! The $660 deducted for supplies reflects the
costs petitioner incurred to buy various supplies.
! The $7,870 deducted for telephone reflects
the cost petitioner incurred for its telephone
service.
! The $18,514 deducted for utilities reflects
the cost of the gas and electricity petitioner
used at its main facility.
OPINION
The parties agree that during the subject year petitioner
had at least one trade or business for purposes of section 280E.
According to respondent, petitioner had a single trade or
business of trafficking in medical marijuana. Petitioner argues
that it engaged in two trades or businesses. Petitioner asserts
that its primary trade or business was the provision of
caregiving services. Petitioner asserts that its secondary trade
or business was the supplying of medical marijuana to its
members. As to its trades or businesses, petitioner argues, the
deductions for those trades or businesses are not precluded by
section 280E in that the trades or businesses did not involve
“trafficking” in a controlled substance. Respondent argues that
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Last modified: November 10, 2007