Businesses that earn profits must pay taxes in the U.S., and while marijuana businesses are illegal under federal law, they are still required to pay federal income taxes on their taxable income. However, the taxable income is subject to different rules due to Section 280E which prohibits certain tax deductions for business involved in cannabis because it is still illegal at the federal level. While for federal income tax purposes, expenses related to the cultivation, marketing, and distribution of cannabis products are not deductible, they may be deductible on state income tax returns, depending on the state's specific laws.

Accountants must have an understanding of Section 280E because it is critical to businesses operating with the cannabis sector, as well as individuals and entities providing service and support to cannabis businesses.

The federal estate tax is imposed on the transfer of an individual's property at death and on certain other transfers considered the equivalent of a transfer at death. The tax is imposed on the decedent's taxable estate plus the decedent's post-1976 lifetime taxable gifts that are not included in the gross estate.

The federal gift tax is imposed on the lifetime transfer of property from an individual to a donee for less than adequate and full consideration. The transfer may be direct or indirect and is measured by the value of the property passing from the donor. In essence, all transactions in which property or property interests are transferred to another for less than full and adequate consideration are gifts subject to the gift tax.