Income Tax Assessment Act 1997

CHAPTER 6 - THE DICTIONARY  

PART 6-1 - CONCEPTS AND TOPICS  

Division 977 - Realisation events, and the gains and losses they realise for income tax purposes  

Trading stock  

SECTION 977-25   Disposal of trading stock: loss realised for income tax purposes  

977-25(1)    
A loss is realised for income tax purposes by a *realisation event consisting of disposal of an item of *trading stock if, and only if:

(a) the item is disposed of, for less than its *cost, in the same income year in which it became part of the trading stock on hand of the entity disposing of it; or

(b) the item is disposed of in a later income year for less than its *value as trading stock of the entity on hand at the start of the later income year.

977-25(2)    
The loss that is realised for income tax purposes by the event is the difference between the amount included in the entity's assessable income because of the disposal and:

(a) the amount that the entity can deduct for the item's *cost; or

(b) the item's *value as *trading stock on hand at the start of the later income year;

as appropriate.

977-25(3)    
If a provision of this Act reduces the loss that would, apart from that provision, be *realised for income tax purposes by the event:

(a) the amount that the entity can deduct for the item's *cost; or

(b) the item's *value as *trading stock on hand at the start of the later income year;

as appropriate, is reduced by the same amount.