Document ID: chunk:federal_register_of_legislation:C2025C00029:section:30:p17
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 30 (pt 17/19)
Character Range: 1543337–1545885

section 124ZO of the Income Tax Assessment Act 1936.
Note 2: If a company becomes a PDF, its shares are taken not to have been trading stock before it became a PDF. See section 124ZQ of the Income Tax Assessment Act 1936.

70‑12  Registered emissions units
  A *registered emissions unit is not *trading stock.

Subdivision 70‑B—Acquiring trading stock

Table of sections
70‑15 In which income year do you deduct an outgoing for trading stock?
70‑20 Non‑arm's length transactions
70‑25 Cost of trading stock is not a capital outgoing
70‑30 Starting to hold as trading stock an item you already own

70‑15  In which income year do you deduct an outgoing for trading stock?
 (1) This section tells you in which income year to deduct under section 8‑1 (about general deductions) an outgoing incurred in connection with acquiring an item of *trading stock. (The outgoing must be deductible under that section.)
 (2) If the item becomes part of your *trading stock on hand before or during the income year in which you incur the outgoing, deduct it in that income year.
 (3) Otherwise, deduct the outgoing in the first income year:
 (a) during which the item becomes part of your *trading stock on hand; or
 (b) for which an amount is included in your assessable income in connection with the disposal of that item.
Note You can deduct your capital costs of acquiring land carrying trees or of acquiring a right to fell trees, to the extent that the trees are felled for sale, or for use in manufacture, by you. (This is because the trees will then usually become your trading stock.) See section 70‑120.

70‑20  Non‑arm's length transactions
  If:
 (a) you incur an outgoing that is directly attributable to your buying or obtaining delivery of an item of your *trading stock; and
 (b) you and the seller of the item did not deal with each other at *arm's length; and
 (c) the amount of the outgoing is greater than the *market value of what the outgoing is for;
the amount of the outgoing is instead taken to be that market value. This has effect for the purposes of applying this Act to you and also to the seller.
Note: This section also affects the value of the item of trading stock at the end of an income year if you value it at its cost under section 70‑45 (Value of trading stock at end of income year).

70‑25  Cost of trading stock is not a capital outgoing
  An outgoing you incur in connection with acquiring an item of *trading stock is not an outgoing of capital or of a capital nature.
Note: This means that paragraph 8‑1(2)(a) does not