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.