Document ID: chunk:federal_register_of_legislation:C2004C00927:clause:1_13:p4
Version: federal_register_of_legislation:C2004C00927
Segment Type: clause
Provision Reference: sch 1 cl 13 (pt 4/13)
Character Range: 388589–391186

allow you to make it later (in either case).

How to work out the item's cost

 (3) The item's cost is what would have been its cost for the purposes of section 70-45 (about valuing trading stock at the end of the income year) if it had been your trading stock ever since you last acquired it. In working that out, disregard section 70-55 (about acquiring live stock by natural increase).

 (4) However, if you last acquired the item for no consideration and the acquisition involved:
 (a) a disposal of the item to you for the purposes of Part IIIA (Capital gains and capital losses) of the Income Tax Assessment Act 1936; or
 (b) the item passing to you as someone's *legal personal representative, or as a beneficiary in a dead person's estate;
its cost is taken to be its market value when you last acquired it.

Exceptions

 (5) Subsection (1) does not apply if you start holding any of the following as *trading stock because they are severed from land:
 (a) standing or growing crops;
 (b) crop-stools;
 (c) trees planted and tended for sale.
(This does not prevent subsection (1) from applying to a severed item that you later start holding as *trading stock.)

Note: A transaction that this section treats as having occurred is disregarded for the purposes of these provisions of the Income Tax Assessment Act 1936:
  *    subsection 47A(10) (which treats certain benefits as dividends paid by a CFC)
  *    paragraph 103A(3A)(c) (which affects whether a company is a public company for an income year).

Subdivision 70-C—Accounting for trading stock you hold at the start or end of the income year

Table of sections

General rules

70-35 You include the value of your trading stock in working out your assessable income and deductions
70-40 Value of trading stock at start of income year
70-45 Value of trading stock at end of income year

Special valuation rules

70-50 Valuation if trading stock obsolete etc.
70-55 Working out the cost of natural increase of live stock
70-60 Valuation of horse breeding stock
70-65 Working out the horse opening value and the horse reduction amount
70-70 Valuing interests in FIFs

General rules

70-35  You include the value of your trading stock in working out your assessable income and deductions

 (1) If you carry on a *business, you compare:
 (a) the *value of all your *trading stock on hand at the start of the income year; and
 (b) the *value of all your *trading stock on hand at the end of the income year.

 (2) Your assessable income includes any excess of the *value at the end of the income year over the value at the start of