Australian Income Tax Guidance Notes Essay Example for Free

Australian Income Tax Guidance Notes EssayHowever, there is a catch you can only treat it as your chief(prenominal) residence for 6 grades. Hence nearing the end of the 6 year period you would need to move back into the house and re-establish it as your main residence. localise simply, you can only have one tax free house at any one time that has to be established as your main residence and if you move out you only have 6 years for it to continue to be your main residence. Topic 5 Annuities and Foreign Pensions Topic 6 Termination payments Topic 7 Small Business EntitiesValuation of trading contrast (S9-180) The three bases to value the trading line of credit are as sideline * Cost (S9-190) * Market selling value (S9-220) * Replacement value (S9-225) 08. 1. 1 Methods used to work out the appeal of trading stock (S9-200) The commissioner accepts the following e military rank methods * FIFO The first items purchased are assumed to be accustomed of first and the represent of trading stock on go at the end of the year is the cost of the items most recently acquired.Where shares cannot be specifically identified, taxpayers must normally use the FIFO method to value trading stock. * Average cost the cost of each item of a particular type on hand at the end of the year is the weighted average of the cost of all such items that were on hand at the beginning of the year and all those acquired during the year. * Standard cost a predetermined standard cost per unit is used. The following valuation methods are not acceptable * LIFO Late in first out * Base stock 08. 1. 1. 1 Trading stock on hand taken into accountWhere a taxpayer carries on business, all trading stock on hand at the start of the income year and all trading stock on hand at the end of the year are taken into account in working out the taxpayers taxable income. Where trading stock is acquired not at arms length, the market value is used. The taxpayer is required to include the market value a s assessable income. 08. 1. 1. 2 inclination not in the ordinary course of business (S9-290) * When trading stock is sold in the ordinary course of trading, gross sales less the cost of production are brought to account by the ordinary trading stock accounting method.Where an item of trading stock (with or without other business assets) is disposed of outside the ordinary course of a taxpayers business, the taxpayer is required to bring to account as assessable income the market value of the stock on the hear of disposal. * The taxpayer takes out stock from his/her business and used it privately is required to bring to account as assessable income the market value of the stock on the realize of drawing. Topic 9 General Deductions 09. 1 Deductions for business-related expenditure