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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.

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History S 8-1(1) amended by No 90 of 2000.

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.

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History S 8-1(2) amended by No 66 of 2003.

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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History S 8-1(3) amended by No 41 of 2005, No 78 of 2001, No 176 of 1999 and No 16 of 1998.