LAWS3101 Study Guide - Midterm Guide: Horse Breeding, Ordinary Income, Gambling
Document Summary
Income from business (eg an accounting rm"s pro t has a clear nexus with the accounting business) (business income is ordinary income under s6-5 of itaa 1997. Ferguson v fct | thomas v fct | fct v jr walker. A small operation can still constitute a business if there are suf cient other business-like characteristics. Ferguson planned to purchase rural land on which he intended to establish a full-scale cattle production business for his retirement in 2-3 years time. To get ready for that, he entered into a management agreement and leased 5 females for 4 years and bred them. All resulting offspring became the property of the taxpayer. It was held that he was carrying on a business, even though it was small and preliminary to his intended future business. Fct v jr walker: small scale goat-breeding operation is a business because the operations were done in a business-like manner. His actions showed he had a pro t-making intention.
