Claw
Income from Business
There are a number of factors in determining whether a business is being carried on: * System and organization * Profit motive * Size and scale of activity * Frequency of transactions * Nature of property * Supplementary work done on the property * Circumstances responsible for the realization
Is a business being carried on?
Ferguson v FCT (1979) 9 ATR 873
It was held that the taxpayer was carrying on business and the expenditures were deductible. The taxpayer carried on activities such as reading periodicals, maintaining a card system. Today under Div 35 of the ITAA 1997 his losses would be quarantined to the farming business due to its small scale.
Has the business commenced?
FCT v Osborne
Watson v DCT (2010) 75 ATR 225
It was held that the taxpayer could not deduct the losses against the insurance payments since the payments were not “from” the business
Is it a primary production?
Ruling TR 97/11
Afforestation Schemes
Hobby or business
Evans v FCT (1989) 20 ATR 922
It was held that the taxpayer’s gambling was not business rather a hobby since it was lacking organization and no attempt was made at maximizing profit.
FCT v Stone
All the extra amounts were held to be income. This is because the income was part of the business she was carrying on, even if unsolicited
Professional Sportsperson seeking employment
Scope of the business
Californian Copper Syndicate v Harris (1904) 5 TC 159
The profits from selling the mines were held to be assessable income. The court decided that the taxpayer intended at the time of acquisition to resell the mine at a profit rather than work the mine. The court looked available capital to work the mine.
Western Goldmines (NL) v DCT (1938) 59 CLR 729
It was held that the profit from selling the mines was not held as assessable income because they had intention to and did work the mines.
Scottish Australian Mining Co Ltd v FCT (1950) 81 CLR 188
There are a number of factors in determining whether a business is being carried on: * System and organization * Profit motive * Size and scale of activity * Frequency of transactions * Nature of property * Supplementary work done on the property * Circumstances responsible for the realization
Is a business being carried on?
Ferguson v FCT (1979) 9 ATR 873
It was held that the taxpayer was carrying on business and the expenditures were deductible. The taxpayer carried on activities such as reading periodicals, maintaining a card system. Today under Div 35 of the ITAA 1997 his losses would be quarantined to the farming business due to its small scale.
Has the business commenced?
FCT v Osborne
Watson v DCT (2010) 75 ATR 225
It was held that the taxpayer could not deduct the losses against the insurance payments since the payments were not “from” the business
Is it a primary production?
Ruling TR 97/11
Afforestation Schemes
Hobby or business
Evans v FCT (1989) 20 ATR 922
It was held that the taxpayer’s gambling was not business rather a hobby since it was lacking organization and no attempt was made at maximizing profit.
FCT v Stone
All the extra amounts were held to be income. This is because the income was part of the business she was carrying on, even if unsolicited
Professional Sportsperson seeking employment
Scope of the business
Californian Copper Syndicate v Harris (1904) 5 TC 159
The profits from selling the mines were held to be assessable income. The court decided that the taxpayer intended at the time of acquisition to resell the mine at a profit rather than work the mine. The court looked available capital to work the mine.
Western Goldmines (NL) v DCT (1938) 59 CLR 729
It was held that the profit from selling the mines was not held as assessable income because they had intention to and did work the mines.
Scottish Australian Mining Co Ltd v FCT (1950) 81 CLR 188