The following section 8-1 as listed below is described as the cornerstone if the Income Tax Assessment Act (1997).
"S8-1(1) you can deduct from your assessable income any loss or outgoing to The extent that:
(a) it is incurred in gaining or producing your assessable income; or
(b) it is necessarily incurred in carrying on a business for the purpose of gaining or producing your assessable income.
However, you cannot deduct a loss or outgoing under this section to the extent that:
(a) it is a loss or outgoing of capital or of a capital nature; or
(b) it is a loss or outgoing of a private or domestic nature; or
(c) it is incurred in relation to gaining or producing your exempt income; or
(d) a provision of this Act prevents you from deducting it.
S8-1(3) A loss or outgoing that you can deduct under this section is called a general deduction."
REQUIRED:
EXPLAIN and VALIDATESection 8-1 of ITAA97 by reference to Case Law, Taxation Office Rulingsand other sections of the ITAA97 and ITAA36. You are required to address under separate headings the underlined words in the course of your explanation.