Hey there your permness, to be *extremely* nit picky, you'd actually want to split the bill *4* ways as while you are in fact growing it, you're growing it FOR you as well. If you didn't have any other patients you would be paying 100% of the bills. (Else that whatever a month would technically be "profit" in the eyes of most judges, a good portion could also see any proportion of the crop you keep from the patients plants as "profit" as well, but it would be extremely murky waters to try to value it...)<snip>
If I had 3 patients I was growing for (and I would be 4), I would split all of the bills up 3 ways, each pays 33% of the cost to grow it. I would pay 0% of the cost to grow it because I am growing it.
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As for the OP's question.
1There is no profit, so there is nothing to claim on taxes. Plus, when it comes to Fed taxes. There is no such thing as Medical Marijuana as far as the feds are concerned, so it would just be State tax, and no profit pretty much means you don't have to claim it. It's not like you are giving out receipts for them to claim on their taxes, so it's not an issue.
Eh, I'm fairly sure they will treat it like beer currently is. We can legally make 100 gallons of the stuff at a time (*note I'm not in an exact frame of mind at the moment) tax free in so long as we don't transport it across state lines, barter with it , or sell it. The same will be true for pot plants, though with a limit of 4 plants per adult (plus 6 for us medical people) I have my suspicions that those limits would be raised over time... but I'm in an optimistic sort of mode at the moment (I even think now that the state dems have tossed their support behind it it might actually pass this time around!) To be honest, 4 plants per adult is ok by me as long as it's just mature female plants as in an ideal world I want to grow 8 plants at a time in my indoor narnia (2 samples of 4 types swapping types every couple of grows for greater variety, possibly keeping a stunted clone of the really good ones that haven't been bred.)you made a good point. how is it going to be legal for recreational use by the feds if medical marijuana is not legal by the feds. mark my words, if it ever passes the feds will be on every pot plant being grown in the great state of Oregon
Sorry thought I answered this before meandering off topic, you *must* pay taxes on your income in the eyes of the government (even if your income was gained from illegal sources). Failure to do so is a fineable (and in some extreme cases jailable) offense. If you're a self employed person who aquires 1099s your income is reported to the IRS each year (and if said income is above $400 you must file self employment taxes). Your job as tax payer (or your accountant's) would be to apply as many deductions as possible to said income. Keep receipts, and talk to an actual accountant, not us randos on the internet for adviceI don't profit from my patients, but I've contemplated selling some of my excess MMJ to dispensaries. Those that I've talked to say they'll issue me a 1099 at the end of the tax year for my profits.
I'm certainly willing to pay taxes, but it seems like a dumb move on my part to expose myself to the feds as part of the industry. What are other people's experiences regarding taxation of their MMJ sales? Is it normal for a dispensary to issue a 1099? It seems to me the best way to protect myself from the law would be to not report those earnings. Then again, if a dispensary issues you a 1099, your earnings are still being reported regardless of whether or not you include them on your individual tax return. It's a damned if you do, damned if you don't type of situation.
OH! Gotcha, this might make you feel better: While you can list your occupation on your tax forms as a consultant, there's no need to explain what you did to earn the money from the companies that issue 1099s for you. On your forms you just state you received $X from ACME whatsit company $Y from blooming garden health care, etc.Yeah, I mean it sounds like a dumb question...durrr, pay your taxes. But when the act of paying taxes provides irrefutable evidence that you're committing a felony, it makes you wonder whether it's really a smart move.
Good to know that it's fairly commonplace for dispensaries to issue 1099's.