How do those in the "legal" marijuana industry spend their money?

"Legal" not legal, because as we all know ultimately there is no such thing as legal marijuana revenue in the United States.

Ten years ago when I was friends with a dispensary owner his lawyer advised him to pay federal taxes under some vague "farm revenue" reference. The lawyer felt that if the taxes were paid in full then at least motivation to go after said dispensary owner would be lessened, but that nothing was a guarantee. Ultimately this allowed said dispensary owner to purchase a nice house with cash with at least some measure of comfort. Last I heard, he's never had any legal trouble or tax trouble from the IRS.

My question is really for lower-level guys in legal states. Say you're a grower who sells to a dispensary. You want to buy a 40k car. Do you just risk it, pay with cash and cross your fingers that the feds have better things to do than cross-reference 40k purchases w income tax forms?

PS: I am aware that money laundering exists and that this is an option some people pursue. Let's not talk about that in this thread please because A) I don't want it to get locked by mods B) That seems a bit overkill, frankly, for your average small time "legal" grower.
 

BarnBuster

Virtually Unknown Member
Dealerships are required to report suspicious activity ie; large cash transactions (>$10k) using IRS form 8300. Financial institutions and those associated with their business can and will file a FinCEN SAR report as well. Since the forms are usually filed electronically and contain your SS#, it's not too difficult for the IRS to both link the transaction to your IRS records and flag your account to maybe generate a Correspondence Audit letter. Doesn't really require much effort from an agent initially as most of this is automated.

"There is no period of limitations on assessment for a false or fraudulent return with intent to evade tax".
 
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Dealerships are required to report suspicious activity ie; large cash transactions (>$10k) using IRS form 8300. Financial institutions and those associated with their business can and will file a FinCEN SAR report as well. Since the forms are usually filed electronically and contain your SS#, it's not too difficult for the IRS to both link the transaction to your IRS records and flag your account to maybe generate a Correspondence Audit letter. Doesn't really require much effort from an agent initially as most of this is automated.
Yes, this was my understanding as well. So, ultimately the question is are most small time growers better off not claiming their weed money to the IRS if they intend on making purchases over 10k?

Obviously in the car buying scenario if one were to pay via certified check form 8300 is not necessary. The bank won't necessarily make a claim either if the transactions were relatively small and consistent (say, 1500/mth, whatever). Perhaps small regular deposits to the bank and cashiers checks are the way they roll for large purchases?

Just a curiosity of mine. I just can't imagine small time "legal" growers filing a claim for their fucking weed money lol.
 

Lucky Luke

Well-Known Member
Yes, this was my understanding as well. So, ultimately the question is are most small time growers better off not claiming their weed money to the IRS if they intend on making purchases over 10k?

Obviously in the car buying scenario if one were to pay via certified check form 8300 is not necessary. The bank won't necessarily make a claim either if the transactions were relatively small and consistent (say, 1500/mth, whatever). Perhaps small regular deposits to the bank and cashiers checks are the way they roll for large purchases?

Just a curiosity of mine. I just can't imagine small time "legal" growers filing a claim for their fucking weed money lol.
"small time" is conjective but i dont think it matters if the cash has come from drugs or just the service or goods any legitimate business can supply and is not declared.
Use it for holidays, dinners, coffee shops, drinking, presents, gambling etc, etc. Sure you can funnel some off and buy toys but be careful as if its a registable thing then there is a trace.
If to much cash is the problem then you have to wash it.- i have no experience in this.
 

Romulanman

Well-Known Member
Take a loan out for the car.
This exactly. There is no reason to be spending $40k cash on anything. Get a loan and pay it off. The interest rate doesn't really matter all that much int hat scenario. You can make $5k+ payments instead and stay off the radar. While you do this you also build your credit. Win, win.
 

LinguaPeel

Well-Known Member
I've had accounts closed for making >5k deposits. They actually sent letters asking me to show where the money came from, what assholes. Should've said prostitution!
 

Apalchen

Well-Known Member
It seems a lot of guys up here like to lease cars. Your best bet in a legal state is to start a business. Can be garden consulting business just don't ever use the m word on any forms. Or a more standard business like land scaping. There are a lot of diff ways to go about it but a lawyer or accountant that is mj friendly will know the best ways to do it.

But as to the original question, no don't go buy a 40k dollar car with cash. Unless you absolutely have to be flashy for some reason you can buy nice reliable cars for under 10k. If you need a truck or something more expensive then finance it.

You can always claim self employment taxes but that's probably not the cheapest option so if you have enough cash it's a problem I'd contact a lawyer or accountant that can help you structure a business.
 
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