Suvat
part timer
- Joined
- Feb 8, 2003
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- 645
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Hey guys,
I'm doing this problem on taxation and have just stumbled upon a dilemma which appears to defy common sense. Let's say you have a hobby farm and sell excess produce for cash. Assuming the farm is not classified as a continuing business (so the receipts of the sale are not assessable as income from business), will the the disposal of your property (i.e. the produce in this case) give rise to a A1 CGT event, that is, gain from disposal of a CGT asset?
The meaning of “CGT asset” in ITAA 1997 s 108-5 is
(a) any kind of property; or
(b) a legal or equitable right that is not property.
Is there any reason why the food you grow yourself does not fall under the definition of property? (or any other common everyday object like a pencil or box of tissues)
I've been looking over the CGT provisions and appear to have found a solution in subdivision 108-C of ITAA 1997 which exempts "personal use assets" acquired for less than $10000 to be exempt from the operation of CGT, but surely there is a more elegant and simple solution? E.g. what happens if the incidental costs of growing your produce total to more than $10000 but you are still only growing it as a hobby, without any intention to profit from it, yet you find you cannot consume all the produce yourself and sell it to someone else for cash?
Thanks.
I'm doing this problem on taxation and have just stumbled upon a dilemma which appears to defy common sense. Let's say you have a hobby farm and sell excess produce for cash. Assuming the farm is not classified as a continuing business (so the receipts of the sale are not assessable as income from business), will the the disposal of your property (i.e. the produce in this case) give rise to a A1 CGT event, that is, gain from disposal of a CGT asset?
The meaning of “CGT asset” in ITAA 1997 s 108-5 is
(a) any kind of property; or
(b) a legal or equitable right that is not property.
Is there any reason why the food you grow yourself does not fall under the definition of property? (or any other common everyday object like a pencil or box of tissues)
I've been looking over the CGT provisions and appear to have found a solution in subdivision 108-C of ITAA 1997 which exempts "personal use assets" acquired for less than $10000 to be exempt from the operation of CGT, but surely there is a more elegant and simple solution? E.g. what happens if the incidental costs of growing your produce total to more than $10000 but you are still only growing it as a hobby, without any intention to profit from it, yet you find you cannot consume all the produce yourself and sell it to someone else for cash?
Thanks.
