Best way to pay a large power bill?? Set up LLC?

[Double F]

Has anyone set up a LLC or S-Corp to pay their power bill? This would also be useful because then we could deduct the power bill costs from overall income and use it as a tax deduction. LOL, kind of ballsy, but i would imagine that the big CO and other "legal" grow ops do it this way.


I know most of the time people just send in multiple money orders in 500-1000 dollar increments. but if i am anticipating a 5k power bill, i would love to be able to use it as a business expense.


What yall think?

 

[Hydrosun]

You can deduct your cost of production, irrespective of the name on the bill.

If commercial power is cheaper than residential power (most of CA) then there could be a savings involved in incorporating a business.

$5k a month in power sounds like a industrial building / warehouse. As to actual payment many grocery store customer service counters take cash payment for utilities.

 

[Double F]

warehouse is on a seperate meter already under an established machine shop company. i cannot ask the existing business to keep under their name, i have to transfer to a new account. a friend with another large warehouse says he set his shop up as business, but that PGE came out and inspected the premises. luckily he had a bunch of kilns and glass blowing equiptment and that satisfied the inspection.


going to setup inspection soon. still looking for ideas and to see if i should try and deduct the power bill as a business expense.

 

[MrDanky]

just pay it on time( automatic deductions ) and you will be just fine..... if your bill is that high then im assuming your yield will be high, so why try to save nickles and dimes? human beings dont get involved until you miss a payment, or call in for any questions about your account as far as i believe...

 

[Treetroit City]

Well "noramlly" any deductions taken from the sale of illegal narcotics goes against 280e.

"No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted."

You're going to need a good accountant that knows his/her way around the MMJ framework.

My CPA assures me we can in fact take deductions in the face of 280e because he knows of case law where it was decided that 280e does not really apply to MMJ business.

In short, find a good experienced MMJ CPA.

 

[babelfish]

keep the bill payed. on time. 1-2k lights/room in house iirc.

 

[Hydrosun]

Well "noramlly" any deductions taken from the sale of illegal narcotics goes against 280e.

"No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted."

You're going to need a good accountant that knows his/her way around the MMJ framework.

My CPA assures me we can in fact take deductions in the face of 280e because he knows of case law where it was decided that 280e does not really apply to MMJ business.

In short, find a good experienced MMJ CPA.

You are incorrect. Cost of production is deductible costs of distribution "trafficking" are not deductible under 280E. That is the IRS guidelines.

280E is unconstitutional, but that is a whole other can of worms.

Also please site the case law instead of just saying there is case law ruling that schedule I cannabis is not subject to 280e.

I disagree with paying attorneys and accountants to help you give money to this immoral government. Growing / production expenses are FULLY deductible. Sales expenses aren't deductible. So don't try to have any expenses associated with distribution. Make sure your trade or business is production and 280e doesn't matter.

 

[Double F]

Well "noramlly" any deductions taken from the sale of illegal narcotics goes against 280e.

"No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted."

You're going to need a good accountant that knows his/her way around the MMJ framework.

My CPA assures me we can in fact take deductions in the face of 280e because he knows of case law where it was decided that 280e does not really apply to MMJ business.

In short, find a good experienced MMJ CPA.

i also know of businesses doing it, but they are mostly storefronts and i do not know if they do something for the actual cost of their growing.


i am trying to talk to more people in CO who are running the big 500 lighters to see what their methods are, but most of my connections out there are merely the growers and not involved with the accounting itself.

keep the bill payed. on time. 1-2k lights/room in house iirc.

we are talking about different ballparks here. i am talking about having anywhere from 50-100s of lights. but lets just say for basic reference 50kw. that would usually cost anywhere from 5-10k per month in power in northern california depending on anything from subsidies to commercial power. i know many guys who use CARE for around 10kw, but for such a large power draw it is very hard to use CARE for 50kw, it has to be done under a business account on commercial rates.

 

[babelfish]

i also know of businesses doing it, but they are mostly storefronts and i do not know if they do something for the actual cost of their growing.


i am trying to talk to more people in CO who are running the big 500 lighters to see what their methods are, but most of my connections out there are merely the growers and not involved with the accounting itself.




we are talking about different ballparks here. i am talking about having anywhere from 50-100s of lights. but lets just say for basic reference 50kw. that would usually cost anywhere from 5-10k per month in power in northern california depending on anything from subsidies to commercial power. i know many guys who use CARE for around 10kw, but for such a large power draw it is very hard to use CARE for 50kw, it has to be done under a business account on commercial rates.

50kw should not be put in a single residence.

 

[Double F]

50kw is considered a "small" warehouse grow where i am from, but yes definately not fit for a residential property. for a commercial warehouse 50kw is very reasonable. there are grows pushing 100s of lights now a days, with some up to 500-1000 lights in colorado.

 

[OrganicOzarks]

50 lights is small. I agree. I was at a 50 light the other day, and it wasn't what people might think it would be.

Setting up an L.L.C. to commit a crime doesn't seem to be the smartest idea to me. I get where you are coming from with the power Company, but I would just do a sole proprietor with a DBA.

That way there are no unintended consequences.

 

[Weird]

get a lawyer and ask about delaware corporations

there are certain corporate structures in certain states that have privacy rights that can furthur shield you from liability

 

[Jhhnn]

It's an issue of how a business is structured. Cost of goods & services aren't deductions, but rather subtraction from gross receipts, before deductions. So you create a wholly-owned subsidiary that sells you product, never makes a profit, therefore creates no tax liability for itself-

http://reason.com/blog/2012/08/06/us-tax-court-says-pot-is-deductible-for

Such arrangements & more are very common at the level of international corporatism.

 

[HOVAH2.0]

So the big timers wt 100 lights actually state on an official government document the expenses they incur while operating a 100 light grow!?...And they sleep at night?