Latest News: Technology |  Celebrity |  Movies |  Apple |  Cars |  Business |  Sports |  TV Shows |  Geek

Trending

Filed under: News

 

Game Offers Tax Advice To Rappers: Write Off Strippers, Sneaks And Medical Marijuana

Dec 29 2013, 11:36pm CST | by

10 Updates
Game Offers Tax Advice To Rappers: Write Off Strippers, Sneaks And Medical Marijuana
Photo Credit: Forbes
 
 

Comments

Full Story

Game Offers Tax Advice To Rappers: Write Off Strippers, Sneaks And Medical Marijuana

The Game may be a successful rapper but his tax advice leaves a little bit to be desired.

Born Jayceon Terrell Taylor, Game was discovered by Dr. Dre in 2003. His debut album “The Documentary” went on to sell over five million copies, reaching double platinum status. Since then, Game has gone on to be nominated for two Grammy awards and a number of Billboard Music Awards.

So, when it comes to music, he knows his stuff. When it comes to taxes? Maybe not so much. You see, Game was out last night in Los Angeles when he was asked a few questions by the paparazzi about taxes. His response?

“Taxes? You can write off d*mn near anything, man.”

When prompted to “name the top three things” that rappers could write off on the taxes, Game had these answers:

  1. “You can write off strip clubs… making it rain.”
  2. Buying Jordans.”
  3. “You can write off buying medical marijuana.”

You can see the whole exchange here.

As always, Game is entertaining. Only he’s not exactly right.

To claim a deduction for business expenses, the Internal Revenue Service requires, at Section 162 of the Tax Code, that it be “ordinary and necessary.” According to the IRS, an ordinary expense is one that is common and accepted in your trade or business. I suspect that paying a stripper is pretty ordinary in the entertainment/rap business… but is it necessary? The IRS defines a necessary expense as “one that is helpful and appropriate for your trade or business.” Patronizing a strip club might be helpful and appropriate for his image so it might be possible to write off club entry fees (I said might) but those dollars for dances? The IRS is going to argue those expenses are entirely personal. And “making it rain” – the act of showering a stripper with dollars – is fairly expensive: remember that you cannot deduct expenses that are lavish or extravagant.

But back to that entry fee and other club-related expenses. Could any of that be deductible as a business expense? Entertaining a client or having a meeting at the club could be deductible as entertainment expenses so long as the primary purpose is business. The expenses must meet also either the associated test or the directly-related test:

  • To meet the associated test, the entertainment must be associated with your trade or business and that entertainment occurs directly before or after a substantial business discussion. This could happen. Could. Likely doesn’t. But then I’m not hanging out with Game so I can’t say for certain.
  • To meet the directly-related test for entertainment expenses, you must show that the primary purpose of the entertainment was to conduct business; that you did engage in business during that time, and you had “more than a general expectation of getting income or some other specific business benefit at some future time” as a result of the expense. Entertainment expenses are not generally considered directly related if there are substantial distractions that prevent you from actively conducting business. I might have been to a strip club or two in my lifetime (or – clearing my throat – maybe I’ve heard things) and there are a number of substantial distractions. I don’t think, in most circumstances, you meet the directly-related test in a strip club.

Next, those Jordans. Clothing is deductible if the only purpose of the clothing/uniform is for business purposes (meaning that you must wear them as a condition of employment) and not suitable for everyday use. Clothing is not deductible if you could wear it outside of your workplace (even if you don’t). Those Jordans? Not merely for business purposes. And Game would totally wear them outside of business. As would half of America. It’s how Michael Jordan stays a bazillionaire .

Finally, that marijuana. I’m sorry: “medical marijuana.” Medical or no, you generally can’t deduct expenses which are illegal, no matter how easy they were to come by or what your “doctor” – I mean, doctor – had to say about it. At Publication 502 , the IRS makes it clear that medical deductions are not allowed for illegal substances, even when prescribed by a doctor:

You cannot include in medical expenses amounts you pay for illegal operations, treatments, or controlled substances whether rendered or prescribed by licensed or unlicensed practitioners.

And despite the fact that medical marijuana is legal in 20 states and the District of Columbia , it remains illegal on a federal level. But just to be sure you understand, the IRS confirms in Publication 502:

You cannot include in medical expenses amounts you pay for controlled substances (such as marijuana, laetrile, etc.). Such substances may be legalized by state law. However, they are in violation of federal law and cannot be included in medical expenses.

So there you have it.

I’m not a rapper (trust me on this, my kids have heard me try) but I do know a little something about taxes. Strippers, Jordans and medical marijuana may big rapper expenses – but they’re not tax deductible. Or, to be more precise:

Nobody likes to pay taxes
But it’s not gonna to fly
To claim deductions on your 1040
For the cost of getting high./>/>/>

And those sneaks you’re wearing?
Those Benjamins paid for strippin’
Won’t fly with IRS -
They’ll simply say you be trippin.’/>/>/>

(I told you I’m not a rapper.)

Want more taxgirl goodness? Pick your poison: You can receive posts by email , follow me on twitter (@taxgirl ) hang out with me on Facebook and check out my YouTube channel . You can also subscribe to the podcast on the site or via iTunes (it’s free).

Source: Forbes

 

iPad Air Giveaway. Win a free iPad Air.

You Might Also Like

Updates


Sponsored Update

Update: 10

4 Firms In Iskandar Malaysia Get Facilitation Fund Totalling RM16.2 Million

Source: Malaysia Today

MALAYSIA-WEATHER-FLOOD
(Bernama) – Four companies have received the facilitation fund amounting to RM16.2 million from TERAJU@Iskandar Malaysia in an information sharing programme on business opportunities and assistan ...
Source: Malaysia Today   Full article at: Malaysia Today 19 hours ago, 7:42am CDT
 


Advertisement


Update: 9

Selangor’s Watergate about to explode

Source: Malaysia Today

LEBANON-SAMAHA-AZMI BISHARA-ISRAEL
Anwar brought Wan Azmi to meet Khalid to try to resolve this matter. Anwar supports the RM2.5 billion claim but Khalid is stubbornly sticking to the figure of RM250 million.... ...
Source: Malaysia Today   Full article at: Malaysia Today 1 day ago, 4:12am CDT
 

More From the Web

Update: 8

GLCs told to provide RM7 billion to develop Bumiputera firms

Source: Malaysia Today

EurAsia Cup presented by DRB-HICOM - Day One
(The Malaysian Insider) – Putrajaya has directed government-linked companies (GLC) to generate RM7 billion in business opportunities for Bumiputera firms this year, Prime Minister Prime Minister Datuk ...
Source: Malaysia Today   Full article at: Malaysia Today Jul 17 2014, 2:05am CDT
 

Update: 7

Rafizi shows proof of Putrajaya’s hand in contentious carpet-trader loan

Source: Malaysia Today

Eileen Ng, The Malaysian Insider PKR lawmaker Rafizi Ramli today revealed documents to prove Putrajaya interfered in the RM32 million Bank Rakyat loan to ‎controversial businessman Deepak Jaikishan. Rafi ...
Source: Malaysia Today   Full article at: Malaysia Today Jul 16 2014, 2:16am CDT
 

Update: 6

PAS MP claims Bank Rakyat loaned carpet-trader RM215m, interest free

Source: Malaysia Today

(Malay Mail Online) – Controversial businessman Deepak Jaikishan (pic) was given a whopping RM215 million interest-free loan from state-owned Bank Rakyat, a PAS lawmaker alleged today, despite Putrajaya’s ...
Source: Malaysia Today   Full article at: Malaysia Today Jul 14 2014, 5:52am CDT
 

Update: 5

MRCB, Nusa Gapurna and PKNS settle suit over RM3 billion PJ Sentral project

Source: Malaysia Today

(The Malaysian Insider) – Malaysian Resources Corp Bhd (MRCB), Nusa Gapurna Development Sdn Bhd (NGD) and PKNS Holdings Sdn Bhd have reached an out-of-court settlement over the ownership of ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 21 2014, 2:53am CDT
 

Update: 4

Story behind Syed Mokhtar’s ‘RM2.25 billion tax-exempt’ Bernas deal revealed, says PKR MP

Source: Malaysia Today

(The Malaysian Insider) – An innocuous written reply in Parliament has provided a peek into the cosy relationship between the Najib administration and Malaysia’s best-known businessman, Tan Sri Syed M ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 15 2014, 12:56pm CDT
 

Update: 3

Constitutional monarchy still murky concept

Source: Malaysia Today

After the RM4.5 billion land sale, the Sultan of Johor secured a 15% stake in MOL Access Portal (MOL) for RM396 million and took a 20% stake in Berjaya Times... R ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 14 2014, 12:37am CDT
 

Update: 2

Sultan of Johor’s RM4.5 bil backlash?

Source: Malaysia Today

"GOLDEN ASIA" Tokyo Premiere Press Conference
Has Sultan Ibrahim of Johor’s succession of big money deals over the last six months caused the tide of public opinion to turn against Johor’s royal palace? KiniBiz examines the... RE ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 11 2014, 8:49am CDT
 

Update: 1

Putrajaya denies carpet dealer given interest-free loan

Source: Malaysia Today

Eileen Ng, The Malaysian Insider Putrajaya today refuted allegations that Bank Rakyat had allowed carpet dealer Deepak Jaikishan to repay a RM32 million loan without interest following inte ...
Source: Malaysia Today   Full article at: Malaysia Today Jun 11 2014, 5:44am CDT
 

Shopping Deals

 
 
 

<a href="/latest_stories/all/all/31" rel="author">Forbes</a>
Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.

 

 

Comments

blog comments powered by Disqus

Latest stories

232 Teeth out of 260 Teeth Extracted from Boy’s Mouth
232 Teeth out of 260 Teeth Extracted from Boy’s Mouth
Indian doctors extracted 232 teeth out of 260 teeth from a boy's mouth via an operation which is the first one of its kind.
 
 
Steven Stamkos Downplays Toronto Maple Leafs Rumors
Tampa Bay Lightning center and team captain Steven Stamkos downplayed rumors that he will sign with the Toronto Maple Leafs in the future.
 
 
Dwayne Johnson and Girlfriend Lauren Hashian hit Hercules Red Carpet
Dwayne Johnson and Girlfriend Lauren Hashian hit Hercules Red Carpet
Finally we can see Dwayne Johnson muscles in the new Hercules movie. The Rock attended the Hercules premiere in LA with girlfriend Lauren Hashian and other hot ladies. See the photos below.
 
 
Chris Capuano Joins New York Yankees
Chris Capuano Joins New York Yankees
The New York Yankees acquired left-handed pitcher Chris Capuano from the Colorado Rockies in exchange for cash considerations on July 24.
 
 
 

About the Geek Mind


Read more about The Geek Mind.