ATO Interpretative Decision

ATO ID 2001/233

Income Tax

Television and Video Cassette Recorder hire costs
FOI status: may be released

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If you reasonably apply this decision in good faith to your own circumstances (which are not materially different from those described in the decision), and the decision is later found to be incorrect you will not be liable to pay any penalty or interest. However, you will be required to pay any underpaid tax (or repay any over-claimed credit, grant or benefit), provided the time limits under the law allow it. If you do intend to apply this decision to your own circumstances, you will need to ensure that the relevant provisions referred to in the decision have not been amended or repealed. You may wish to obtain further advice from the Tax Office or from a professional adviser.

Issue

Is the taxpayer, a publicist, entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the cost of hiring a television and video cassette recorder (VCR) used at home for work related purposes?

Decision

Yes. Expenses incurred for the cost of hiring for a television and VCR are deductible subject to substantiation requirements.

Facts

The taxpayer, a publicist, is required to view video tapes at home. The costs of hiring a television and VCR are not reimbursed by the employer.

The television and VCR are used exclusively for previewing tapes as part of the taxpayer's employment. The taxpayer views the video tapes in a room that has no antenna outlet thus making free to air television unavailable. The taxpayer has another television and VCR for private use.

Reasons for Decision

Subsection 8-1(1) of the ITAA 1997 states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income.

However, under subsection 8-1(2) of the ITAA 1997, you cannot deduct a loss or outgoing to the extent that, in this case, it is a loss or outgoing of capital, or of a capital nature or it is a loss or outgoing of a private or domestic nature.

As hiring the equipment is directly related to gaining or producing assessable income and is not a loss or outgoing of capital, or of a capital, private or domestic nature, the taxpayer is entitled to claim a deduction for the full cost of hiring the equipment subject to substantiation requirements.

Date of decision:  25 June 2001

Legislative References:
Income Tax Assessment Act 1997
   section 8-1
   subsection 8-1(1)
   subsection 8-1(2)

Keywords
Deductions and expenses
Lease and hire expenses

Business Line:  Small Business/Individual Taxpayers

Date of publication:  21 August 2001

ISSN: 1445-2782

history
  Date: Version:
You are here 25 June 2001 Original statement
  6 June 2008 Archived

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