Document ID: chunk:federal_register_of_legislation:C2004C00927:clause:1_13:p8
Version: federal_register_of_legislation:C2004C00927
Segment Type: clause
Provision Reference: sch 1 cl 13 (pt 8/13)
Character Range: 398262–400868

be market value
70-100 Notional disposal when you stop holding an item as trading stock
70-105 Death of owner
70-110 You stop holding an item as trading stock but still own it
70-115 Compensation for lost trading stock

70-80  Why the rules in this Subdivision are necessary

 (1) When you dispose of an item of your trading stock in the ordinary course of business, what you get for it is included in your assessable income (under section 6-5) as ordinary income.

 (2) If an item stops being your trading stock for certain other reasons, an amount is generally included in your assessable income to balance the reduction in trading stock on hand, which is a transaction on revenue account.

 (3) The other reasons for an item to stop being your trading stock are:
 (a) you dispose of it outside the ordinary course of *business; or
 (b) interests in it change; or
 (c) you die; or
 (d) you stop holding it as trading stock.

Operative provisions

70-85  Application of this Subdivision to certain other assets

  This Subdivision (except section 70-115) applies to certain assets of a *business as if they were *trading stock on hand of the entity that carries on that business.  The assets are:
 (a) standing or growing crops; and
 (b) crop-stools; and
 (c) trees planted and tended for sale.

Note: Section 70-115 assesses insurance or indemnity amounts for lost trading stock.

70-90  Assessable income on disposal of trading stock outside the ordinary course of business

 (1) If you dispose of an item of your *trading stock outside the ordinary course of a *business:
 (a) that you are carrying on; and
 (b) of which the item is an asset;
your assessable income includes the market value of the item on the day of the disposal.

 (2) Any amount that you actually receive for the disposal is not included in your assessable income (nor is it *exempt income).

Note 1: In the case of an asset covered by section 70-85 (which applies this Subdivision to certain other assets), the disposal will usually involve disposing of the land of which the asset forms part.

Note 2: For certain disposals of live stock by primary producers, special rules apply: see Subdivision 385‑E.

Note 3: If the disposal is by way of gift, you may be able to deduct the gift: see Division 30 (Gifts).

Note 4: If the disposal is of trees, you can deduct the relevant portion of your capital costs of acquiring the land carrying the trees or of acquiring a right to fell the trees: see section 70-120.

70-95  Purchase price is taken to be market value

  If an entity disposes of an item of the entity's *trading stock