Sec. 3128. Denial of deductions and credits for expenditures in illegal businesses
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Section 280E is amended to read as follows: 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, or the carrying out of such trade or business is a felony under Federal law or the law of any State in which such trade or business is conducted. .
The table of sections for part IX of subchapter B of chapter 1 is amended by striking the item relating to section 280E and inserting the following new item: Sec. 280E. Expenditures in connection with illegal businesses. . The amendments made by this section shall apply to amounts paid or incurred after the date of the enactment of this Act in taxable years ending after the date of the enactment of this Act.