ACC30005 Lecture Notes - Lecture 2: Ordinary Income, Tax Accounting In The United States, Property Income
Document Summary
Topic 2: part a: business income, property income and compensation. Assessable income comprises: ordinary income itaa97 s. 6-5. Usually connected with a source: personal services: e. g. salary, allowances, bonuses, carrying on a business: e. g. sales, commissions, grants, subsidies, profit making schemes: e. g. commercial speculation. Income from property: e. g. dividends, interest or rental returns on capital invested. Alternatively, periodic receipts in the nature of income may be included: regular, expected and relied upon: e. g. pensions, annuities. Any profession, trade, employment, occupation or calling, but does not include occupation as an employee . Explicitly excludes employees implicitly excludes passive investors who merely earn income from their property: usually, ordinary income includes gross business receipts. Historically, courts had taken a narrow view that only the normal proceeds of an ongoing business are regarded as ordinary income. Transactions outside the ordinary course of a business before the 1980s were often excluded from being ordinary income.
