Commonwealth Consolidated Acts

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INCOME TAX ASSESSMENT ACT 1997 - SECT 118.25

Trading stock

  (1)   A * capital gain or * capital loss you make from a * CGT asset is disregarded if, at the time of the * CGT event, the asset is:

  (a)   your * trading stock; or

  (b)   if you are a partner, trading stock of the partnership; or

  (c)   if you are absolutely entitled to the asset as against the trustee of a trust (disregarding any legal disability), trading stock of the trustee.

  (2)   A * capital gain or * capital loss you make in these circumstances is disregarded:

  (a)   you start holding as * trading stock a * CGT asset you already own but do not hold as trading stock; and

  (b)   you elect under paragraph   70 - 30(1)(a) to be treated as having sold the asset for its cost (worked out under that section).

Note 1:   Paragraph   70 - 30(1)(a) allows you to elect the cost of the asset, or its market value, just before it became trading stock.

Note 2:   You may make a capital gain or loss if you elect its market value: see CGT event K4.



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