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- IRS code 280E just changed. Here's what it means for you.
IRS code 280E just changed. Here's what it means for you.
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I share the 4-5 most important accounting that actually matter. I scroll so you don’t have to.
So grab your coffee, take a quick break, and lets catch up.
In this issue:
Companies' real emissions are 37x worse than what they report
Trump gave weed companies an $80 million tax break
AI models keep getting smarter and China is catching up
- Ledger Lowdown Team
WTF of the Day🤯
Companies' Real Emissions Are 37x Worse Than Reported
Two of the biggest corporate climate reporting standards are heading toward a breakup. The Greenhouse Gas Protocol is used by 97% of S&P 500 companies. The Science Based Targets initiative has 10,000 corporate members. Both have been using the same accounting method for over a decade. That might change.
Here is what they are fighting about. Companies calculate their electricity emissions using average grid data, then offset them with renewable energy certificates even if the clean energy is hundreds of miles away. A data center in West Virginia running on coal can report zero emissions because it bought RECs from a solar farm in California.
Microsoft is a good example. Under current rules they reported 259,090 tons of CO2. Under the stricter method, the real number is just under 10 million tons. That is a 37x difference. If these two groups split on how to measure it, companies will have two different numbers and nobody will know which one to trust.
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What’s poppin in accounting🍿
Trump Just Gave Weed Companies an $80 Million Tax Break
Trump's acting AG reclassified medical marijuana from Schedule I to Schedule III. Sounds boring but it is a massive deal. IRS code 280E has been blocking cannabis companies from deducting normal business expenses because weed is still federally illegal. That changes now.
One company, Verano, which operates 10 Zen Leaf dispensaries in Chicago, says it will save $80 million a year. Their CEO said it puts them on a level playing field with any other legal business.
Here is the weird part. Recreational weed is still Schedule I. Medical weed is now Schedule III. Same product, same packaging, completely different federal classification depending on where you bought it. Lawyers are pointing out this has never happened with any other drug.
Weekly Trend Chart 📊
Al Models Are Improving Every Year
Stanford's annual AI report has two big findings. China has closed the gap with the US in AI model quality and the idea that AI hit a plateau is completely wrong. Models are still improving fast.
Here is the weird part though. All major frontier models are now basically tied at the top of every benchmark. The report says they are nearly indistinguishable. The authors think the tests used to measure AI may not be keeping up. One example: AI can win a gold medal at the International Mathematical Olympiad but cannot reliably tell time by looking at a clock face.
The US is also losing global AI talent. The H-1B visa program now has a $100,000 fee per hire, and AI researchers are staying away. So even as models get better, America is making it harder to attract the people building them.
Meme of the Day😂
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