Olive v. Commissioner
United States Court of Appeals for the Ninth Circuit
792 F.3d 1146 (2015)
Relevant factsFree
Olive (plaintiff) operated a California medical-marijuana dispensary, selling marijuana while offering snacks and other services for free; Section 280E of the tax code bars deductions for expenses tied to trafficking in federally controlled substances, and the Tax Court disallowed Olive's dispensary deductions on that basis. Olive appealed, noting the marijuana was legal under California law.
IssueFree
Whether tax deductions are permitted for business expenses associated with a business consisting of selling controlled substances prohibited by federal law.