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INCOME TAX ASSESSMENT ACT 1997 - SECT 328.295 Value of trading stock on hand

INCOME TAX ASSESSMENT ACT 1997 - SECT 328.295

Value of trading stock on hand

  (1)   If you make a choice under section   328 - 285 for an income year, the * value of all your * trading stock on hand at the start of the income year is:

  (a)   the same amount as was taken into account under this Act at the end of the previous income year; or

  (b)   zero if no item of trading stock was taken into account under this Act at the end of the previous income year.

Note:   The amount taken into account at the end of the previous income year is worked out under either section   70 - 45 or subsection   (2) of this section.

  (2)   If you make a choice under section   328 - 285 for an income year, this Act applies to you as if the * value of all your * trading stock on hand at the end of the year were equal to the value of all your trading stock on hand at the start of the year.

Note:   If you do not make a choice under section   328 - 285, the value of trading stock on hand at the end of the year is worked out using section   70 - 45.

Example:   Angela operates a riding school, and also sells riding gear. Her business is a small business entity for the 2008 - 09 income year and makes a choice under section   328 - 285 for that year.

  At the start of the 2008 - 09 income year, the opening value of Angela's trading stock is $30,000. Using her reliable inventory system, she estimates the closing value to be $34,000.

  The closing value for the 2008 - 09 income year, and the opening value for the 2009 - 10 income year, will be $30,000.

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