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 977-40   Ending of an income year: gain realised for income tax purposes  

977-40(1)  
A gain is realised for income tax purposes by a *realisation event that happens to an item of *trading stock and consists of the ending of an income year if, and only if, the *value of the item, as trading stock of an entity on hand at the end of that income year, is greater than:


(a) its *cost, if it became part of the trading stock on hand of the entity during that income year; or


(b) otherwise, its value as trading stock of the entity on hand at the start of that income year.

977-40(2)  
The gain that is realised for income tax purposes by the event is the difference between the *value of the item, as *trading stock of the entity on hand at the end of that income year 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 income year;

as appropriate.

977-40(3)  
If a provision of this Act reduces the gain 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 income year;

as appropriate, is increased by the same amount.


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