Taxation Determination TD 92/126







This Determination, to the extent that it is capable of being a 'public ruling' in terms of Part IVAAA of the Taxation Administration Act 1953, is a public ruling for the purposes of that Part. Taxation Ruling TR 92/1 explains when a Determination is a public ruling and how it is binding on the Commissioner. Unless otherwise stated, the Determination applies to transactions entered into both before and after its date of issue. | 1. Net profit made on the sale of the land is assessable income under subsection 25(1) of the Income Tax Assessment Act 1936. | 2. The land is not treated as trading stock because a business of trading in land was not commenced. | 3. In calculating the profit on the sale of the land the cost of the land is deducted from the proceeds of sale. | Example: A taxpayer purchases broadacres of land with the intention of development and subdivision into residential blocks for sale. After purchase, the property market suffers a downturn and the taxpayer's expected source of finance fails to materialise. The land lies idle until it is eventually sold some years later. | The net profit on the sale of land is assessable income under subsection 25(1). | Commissioner of Taxation 16/07/92


Related rulings: TD 92/124 TD 92/125 TD 92/127 TD 92/128
Legislative references: ITAA 25(1)
Subject references: land development development does not proceed