Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 8.1

             (1)  You can deduct from your assessable income any loss or outgoing to the extent that:

                     (a)  it is incurred in gaining or producing your assessable income; or

                     (b)  it is necessarily incurred in carrying on a * business for the purpose of gaining or producing your assessable income.

Note:          Division 35 prevents losses from non-commercial business activities that may contribute to a tax loss being offset against other assessable income.

             (2)  However, you cannot deduct a loss or outgoing under this section to the extent that:

                     (a)  it is a loss or outgoing of capital, or of a capital nature; or

                     (b)  it is a loss or outgoing of a private or domestic nature; or

                     (c)  it is incurred in relation to gaining or producing your * exempt income or your * non-assessable non-exempt income; or

                     (d)  a provision of this Act prevents you from deducting it.

For a summary list of provisions about deductions, see section 12-5.

             (3)  A loss or outgoing that you can deduct under this section is called a general deduction .

For the effect of the GST in working out deductions, see Division 27.

Note           If you receive an amount as insurance, indemnity or other recoupment of a loss or outgoing that you can deduct under this section, the amount may be included in your assessable income: see Subdivision 20-A.