BTF3931 Study Guide - Final Guide: Ordinary Income, Sports Equipment, Myer
6 Aug 2018
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(ordinary income) income from business (w6) (legislation: sec 6-5 and sec 15-2 of itaa97) Flow concept: gains arising from carrying on a business constitute as ordinary income (s6-5) Characterising receipts as ordinary income from a business activity involves a two-step process (must. Satisfy both!: carrying on a business, normal proceeds of a business, determine when a hobby or recreational, receipt from normal proceeds of a business activity becomes a business: Sells shoes: or exception: if receipt is not under ordinary course of business s21a third party. Characterising a receipt as part of normal proceeds of the business requires: If receipt is not within normal proceeds it may be ordinary income in statutory income. Indicators of a business activity: courts use various indicators/characteristics that indicate the presence of a business e. g. ferguson v. Fct (1979: not one characteristics along can be used to decisive factor, but a question of fact and degree.
