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Income tax: can a taxpayer claim as a deduction the amount paid to purchase standing or growing crops?

Preamble

Yes, if the amount paid is the market value of the crops on the day of their purchase.

Where subsection 36(1) of the Income Tax Assessment Act 1936 applies, it allows the purchaser of the standing or growing crops to claim a deduction for their value ( Butcher v. FCT; Blick v. FCT (1950) 5 AITR 44, 9 ATD 177).

The amount which is deductible is the market value of the crops on the day of their purchase. Where it is not possible to determine their market value, a fair and reasonable value is to be used (subsection 36(8)).

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