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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 1 - INTRODUCTION AND CORE PROVISIONS  

PART 1-3 - CORE PROVISIONS  

Division 8 - Deductions  

SECTION 8-1  General deductions  

 ITAA 36

8-1(1)  

You can deduct from your assessable income any loss or outgoing to the extent that:


(a) it is incurred in gaining or producing your assessable income; or


(b) it is necessarily incurred in carrying on a *business for the purpose of gaining or producing your assessable income.

Note:

Division 35 prevents losses from non-commercial business activities that may contribute to a tax loss being offset against other assessable income.

8-1(2)  

However, you cannot deduct a loss or outgoing under this section to the extent that:


(a) it is a loss or outgoing of capital, or of a capital nature; or


(b) it is a loss or outgoing of a private or domestic nature; or


(c) it is incurred in relation to gaining or producing your *exempt income or your *non-assessable non-exempt income; or
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(d) a provision of this Act prevents you from deducting it.

For a summary list of provisions about deductions, see section 12-5.

8-1(3)  

A loss or outgoing that you can deduct under this section is called a general deduction.

For the effect of the GST in working out deductions, see Division 27.

Note:

If you receive an amount as insurance, indemnity or other recoupment of a loss or outgoing that you can deduct under this section, the amount may be included in your assessable income: see Subdivision 20-A.


 



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