Ordinary income from a business—treatment of trading stock
1074 Ordinary income from a business—treatment of trading stock
If:
a person carries on a business; and
the value of all the trading stock on hand at the end of a tax year is greater than the value of all the trading stock on hand at the beginning of that tax year;
the person’s ordinary income for that tax year in the form of profits from the business is to include the amount of the difference in values.
If:
a person carries on a business; and
the value of all the trading stock on hand at the end of a tax year is less than the value of all the trading stock on hand at the beginning of that tax year;
the person’s ordinary income for that tax year in the form of profits from the business is to be reduced by the amount of the difference in values.
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