Cannabis 280E Reconciler
$2,194,200.00 of $6,466,700.00 in expenses (33.9%) is disallowed under 280E, adding $460,782.00 of federal tax at 21%; COGS allowed under IRC 471 is $4,208,500.00.
Account 5200 (COGS - Budtender labor allocation), Retail department, hint 'cogs', booked in COGS by its hint. Not an IRC 471 cost: Retail or selling department cost (1.471-11(c)(2)(ii)); all $215,000.00 moves to disallowed expense under 280E.
Method1280E disallows deductions and credits of a business trafficking in Schedule I or II substances; COGS is a reduction of gross receipts, not a deduction, so only IRC 471 inventory costs survive.
2Producer: Treas. Reg. 1.471-11 full absorption. Production department costs are inventoriable; shared labor is allocated by headcount (45.0%) and shared rent, utilities, security, repairs, depreciation and insurance by square footage (70.0%); selling, G&A, interest and officers' pay are excluded (1.471-11(c)(2)(ii)).
| Account | Name | Department |
|---|---|---|
| 5200 | COGS - Budtender labor allocation | Retail |
| 5210 | COGS - Exit bags and customer packaging | Retail |
| 6010 | Retail wages (budtenders) | Retail |
Trial balance with account classifications
280E workpaper with the disallowed amount and tax effect (280E workpaper, Account-level workpaper (CSV))
$3,500 / month, 30% to the referring partner
Read in memory for the session, never stored, never used to train a model.
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