Taxes and cannabis

Brewery

Brewery

Well-Known Member
got to thinking about cannabis and income tax and I'm wondering what mmar folks have done in the past

Assuming you are just growing for yourself do you expense the costs of the grow as a medical expense on your federal and provincial returns?

What about those who were dg's did you treat it like a home business and claim the income/loss on your returns?

Ill be reaching out to my tax specialist for some advice but thought this would be a good place to start.
 
bcbreeder

bcbreeder

Well-Known Member
always declare the income and expenses/keep receipts
if there was ever a legal problem with your grow
rcmp forwards all info about your grow to revenue canada for follow up
you get a call from a special department///
if you have all your receipts and expenses in order they have to accept it
if you hide the income they will pursue you on a per gram basis for taxes owing
 
Brewery

Brewery

Well-Known Member
bcbreeder said:
always declare the income and expenses/keep receipts
if there was ever a legal problem with your grow
rcmp forwards all info about your grow to revenue canada for follow up
you get a call from a special department///
if you have all your receipts and expenses in order they have to accept it
if you hide the income they will pursue you on a per gram basis for taxes owing
Click to expand...
When you declare do you use the "other income" line and just put the net income or do you file itemized as a small business?
 
bcbreeder

bcbreeder

Well-Known Member
i set mine up as a farm income/expense operation
this was retroactively done after a number of years working for a dispensary
look up the provisions for farm income/expenses
say you started on year x and had investments in equipment/power/fertilizers
with the farm income/expense provisions you can amortize and depreciate your
equipment over x years against your income of y and over the years it is an effective and legal
way of declaring the income against the expenses
luckily i had a great tax whiz friend do it up for me but any tax accountant that has done farm
income tax returns could set you up
in the end revenue canada accepted all my returns
still had to have a sit down with the two boys at the special department
but stood my ground and in the end we shook hands
if you dont do it up front they have some interesting ways of catching you up
like assigning you a gst number that you werent aware you had
so then you end up with a non compliant gst account that you didnt know about
and they hold up your tax refunds on your personal returns till its cleared up/.///
 
doingdishes

doingdishes

Well-Known Member
a friend of mine who works at CRA told me you can't claim the stuff if you can use it "for other purposes"
i would still try though. the worst thing they'll tell you is no. i wouldn't spend my refund until you got the OK letter. filing it through Turbotax is fine but then CRA will review it and let you know about your deductions
 
Brewery

Brewery

Well-Known Member
bcbreeder said:
i set mine up as a farm income/expense operation
this was retroactively done after a number of years working for a dispensary
look up the provisions for farm income/expenses
say you started on year x and had investments in equipment/power/fertilizers
with the farm income/expense provisions you can amortize and depreciate your
equipment over x years against your income of y and over the years it is an effective and legal
way of declaring the income against the expenses
luckily i had a great tax whiz friend do it up for me but any tax accountant that has done farm
income tax returns could set you up
in the end revenue canada accepted all my returns
still had to have a sit down with the two boys at the special department
but stood my ground and in the end we shook hands
if you dont do it up front they have some interesting ways of catching you up
like assigning you a gst number that you werent aware you had
so then you end up with a non compliant gst account that you didnt know about
and they hold up your tax refunds on your personal returns till its cleared up/.///
Click to expand...
Yes makes sense to capitalize the assets/equipment and take the depreciation expense over time.
 
Brewery

Brewery

Well-Known Member
doingdishes said:
a friend of mine who works at CRA told me you can't claim the stuff if you can use it "for other purposes"
i would still try though. the worst thing they'll tell you is no. i wouldn't spend my refund until you got the OK letter. filing it through Turbotax is fine but then CRA will review it and let you know about your deductions
Click to expand...
We will see what cra says about that topic very shortly. Getting medical expenses audited as we speak and included are mmpr LP receipts. It's not much $$ and I found many more dollars worth of other medical expenses i never filed. If they determine mmj is excluded I will file amended returns and get back more money. That or cra will make up rules and try to steal from me anyways.
 
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