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Taxation Determination

TD 92/181

Income tax: do mutual receipts form part of 'exempt income' in the context of general domestic current year losses and undeducted prior year losses?

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FOI status:

may be releasedFOI number: I 1213567

This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, this Determination applies to years commencing both before and after its date of issue.

1. No.

2. Subsection 6(1) of the Income Tax Assessment Act 1936 defines 'exempt income' as income which is exempt from income tax and includes income which is not assessable income.

3. The principle of mutuality recognises that one cannot make a profit out of oneself and that income can only be derived from sources outside of oneself. A mutual receipt cannot be treated as income.

Example:

Taxpayer X has allowable business deductions in a current year of income of $50,000, business receipts of $45,000, net mutual receipts of $5,000 and net exempt income of $2,000. The loss to be carried forward in terms of subsection 79E(1) is $3,000, calculated as follows:
Business Receipts $ 45,000
Net Exempt Income 2,000
Total 47,000
Less:business deductions 50,000
Carried Forward Loss $ 3,000
Note: Net mutual receipts of $5,000 are ignored.

Commissioner of Taxation
29/10/92

Previously issued as Draft TD 92/D161

References

ATO references:
NO NEW TD10

ISSN 1038 - 8982

Related Rulings/Determinations:

IT 2505

Subject References:
carry forward losses;
current year losses;
exempt income;
mutual income;
net exempt income;
sporting clubs

Legislative References:
ITAA 6(1)
ITAA 79E
ITAA 80

TD 92/181 history
  Date: Version: Change:
You are here 29 October 1992 Original ruling  
  25 March 2015 Withdrawn  

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