BTF3931 Study Guide - Final Guide: Myer, Ordinary Income, Pub

• School: Monash University
• Department: Business - BTF
• Course: BTF3931
• Professor: Johnathan

Document Summary

Assessable income (oridinary income) (w4) (legislation: sec 6-5 and sec 15-2 of itaa97) Ordinary income is (cid:862)i(cid:374)(cid:272)o(cid:373)e a(cid:272)(cid:272)ordi(cid:374)g to ordi(cid:374)ar(cid:455) (cid:272)o(cid:374)(cid:272)epts(cid:863) a(cid:374)d is assessa(cid:271)le u(cid:374)der the s6-5 income tax. Assessment act 1997 (cid:862)i(cid:374)co(cid:373)e accordi(cid:374)g to ordi(cid:374)ary co(cid:374)cepts(cid:863: gains require characterization by courts to determine if the gain has income character. Jordan cj in scott v commissioner of taxation 1935 i(cid:374)terpreted i(cid:374)(cid:272)o(cid:373)e to (cid:271)e deter(cid:373)i(cid:374)ed (cid:862)i(cid:374) a(cid:272)(cid:272)orda(cid:374)(cid:272)e with the ordi(cid:374)ar(cid:455) (cid:272)o(cid:374)(cid:272)epts a(cid:374)d usages of (cid:373)a(cid:374)ki(cid:374)d(cid:863) Prerequisites of ordinary income: a receipt cannot be ordinary income unless it fulfils both prerequisites: Cash or not cash convertiable e. g. tennant v smith 1892 bank gave him a free house to work at the bank cannot rent out not ordinary income: what is cash convertible. Item must be readily converted to cash: must not be illegal to sell the goods payne v fct, statutory overrides provision: s21a itaa36 and s15-2. If a receipt is not a genuine gain, it is not.