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“Right from the start we considered our primary function as being
a community center for seriously ill patients in San Francisco.
And only secondarily as a place where they could access their
medicine.” The evidence suggests that petitioner’s operations
were conducted with that primary function in mind, not with the
principal purpose of providing marijuana to members.
As stated by the Board of Tax Appeals in Alverson v.
Commissioner, 35 B.T.A. 482, 488 (1937): “The statute is not so
restricted as to confine deductions to a single business or
principal business of the taxpayer. A taxpayer may carry on more
than one trade or business at the same time.” Moreover, as the
Supreme Court has observed in the context of illegal,
nondeductible expenditures: “It has never been thought * * *
that the mere fact that an expenditure bears a remote relation to
an illegal act makes it non-deductible.” Commissioner v.
Heininger, 320 U.S. 467, 474 (1943).
Respondent relies heavily on his assertion that
“Petitioner’s only income was from marijuana-related matters,
except for a couple of small donations”. The record does not
support that assertion, and we decline to find it as a fact.
Indeed, the record leads us to make the contrary finding that
petitioner’s caregiving services generated income attributable to
those services. In making this finding, we rely on the testimony
of petitioner’s executive director, whom we had an opportunity to
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