INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-25 - TRADING STOCK  

Division 70 - Trading stock  

Subdivision 70-D - Assessable income arising from disposals of trading stock and certain other assets  

SECTION 70-80   Why the rules in this Subdivision are necessary  

70-80(1)  
When you dispose of an item of your trading stock in the ordinary course of business, what you get for it is included in your assessable income (under section 6-5 ) as ordinary income.

Note:

An incorporated body is treated as disposing of an item of its trading stock in the ordinary course of business if the body ceases to exist and disposes of the asset to a company that has not significantly different ownership: see Division 620 .

70-80(2)  
If an item stops being your trading stock for certain other reasons, an amount is generally included in your assessable income to balance the reduction in trading stock on hand, which is a transaction on revenue account.

70-80(3)  
The other reasons for an item to stop being your trading stock are:


(a) you dispose of it outside the ordinary course of business; or


(b) interests in it change; or


(c) you die; or


(d) you stop holding it as trading stock.


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