Edited version of private ruling

Authorisation Number: 1011667634701

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Ruling

Subject: Capital gains tax (CGT) and sale of property

Are you entitled to claim a deduction for the cost of purchasing newspapers and magazines?

Yes.

This ruling applies for the following periods

Year ended 30 June 2009

Year ended 30 June 2010

The scheme commenced on

1 July 2008

Relevant facts

You are employed in the sales area.

You deal with the whole Australian market.

You purchase various magazines and newspapers. For one you will only claim a portion of the cost as it is used by family members.

Relevant legislative provisions

Income Tax Assessment Act 1997 Section 8-1.

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a taxpayer to deduct from their assessable income any loss or outgoing to the extent it is incurred in gaining or producing assessable income.

An outgoing is considered to be incurred in gaining or producing assessable income if there is a sufficient connection between the outgoing and the activities which produce or are expected to produce assessable income. As a general rule, an outgoing will not be deductible unless it is incurred in gaining or producing the assessable income of the taxpayer who incurs it.

Newspapers and magazines

A deduction is not generally allowable under section 8-1 of the ITAA 1997 for the cost of newspapers as it is a private expense. Even though a taxpayer may be able to use part of the information in the course of their work, the benefit gained is usually remote and the proportion of the expense that relates directly to work is incidental to the private expenditure.

Taxation Ruling TR 98/14 discusses the work related deductions available to employee journalists. It states that some employee journalists may need to utilise particular newspapers or magazines directly as part of their job. If the main reason for the purchase of newspapers or magazines by an employee journalist is for their use in the course of research, a reasonable work-related portion of the cost is allowable (analogous cases: Case S12 85 ATC 165; (1985) 28 CTBR (NS) Case 18 and Case U5 87 ATC 124).

While it is acknowledged employee journalists may require access to different newspapers and magazines as part of their employment to a greater degree than other taxpayers, not all newspapers and magazines are relevant to all journalists. Many journalists who specialise in a particular field would only require access to certain publications as part of their income earning activities.

In Case R70 84 ATC 493; (1984) 27 CTBR (NS) Case 124, a supervisor in the Commonwealth Auditor-General's Department was allowed a deduction for the cost of specific issues of The National Times and The Australian Financial Review. It was held that there was a sufficient connection between the duties carried out by the taxpayer and the content of these specific publications. However, a deduction was not allowed for the cost of the local newspaper, The Canberra Times, as the expense was essentially private in nature.  

In your case, you are employed in the sales area. You purchase magazines and newspapers to enable you to conduct your business.

As this research is directly related to your work and any private use is incidental to this research, the cost of your newspapers and magazines totalling $X is an allowable deduction under section 8-1 of the ITAA 1997.