Draft Taxation Determination

TD 93/D231

Income tax: can a taxpayer claim as a deduction the amount paid to purchase standing or growing crops?

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FOI status:

draft only - for comment

Preamble

Draft Taxation Determinations (TDs) present the preliminary, though considered, views of the ATO. Draft TDs may not be relied on; only final TDs are authoritative statements of the ATO.

1. Yes, if the amount paid is the market value of the crops on the day of their purchase.

2. Where subsection 36(1) of the Income Tax Assessment Act 1936 applies, it allows the purchaser of the standing or growing crops to claim a deduction for their value (Butcher v. FCT; Blick v. FCT (1950) 5 AITR 44, 9 ATD 177).

3. The amount which is deductible is the market value of the crops on the day of their purchase. Where it is not possible to determine their market value, a fair and reasonable value is to be used (subsection 36(8)).

Commissioner of Taxation
9 September 1993

References


BO TOW33

ISSN 1038 - 8982

Related Rulings/Determinations:

TD 93/D230

Subject References:
deduction
crops
trading stock

Legislative References:
ITAA 36(1)

Case References:
Butcher v FCT; Blick v FCT
(1950) 9 ATD 177
(1950) 5 AITR 44

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