Deductions

Situations that attract our attention include:

• incorrectly claiming deductions (see income and deductions for business) that decrease taxable income including from    
  • failing to add back non-deductible expenses in the reconciliation statement
  • inappropriately valuing closing stock at below cost or replacement value
   
• payments made to related parties for services that either  
  • were not provided
  • had no connection with earning assessable income
   
• undefined expenses
• using the trading stock election rules to lower the valuation of closing stock.

For more information on trading stock, see TR 93/23 Valuation of trading stock subject to obsolescence or other special circumstances.