Television and Video Cassette Recorder hire costs

Is the taxpayer, a publicist, entitled to a deduction under section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) for the cost of hiring a television and video cassette recorder (VCR) used at home for work related purposes?

Yes. Expenses incurred for the cost of hiring for a television and VCR are deductible subject to substantiation requirements.

The taxpayer, a publicist, is required to view video tapes at home. The costs of hiring a television and VCR are not reimbursed by the employer.

The television and VCR are used exclusively for previewing tapes as part of the taxpayer's employment. The taxpayer views the video tapes in a room that has no antenna outlet thus making free to air television unavailable. The taxpayer has another television and VCR for private use.

Subsection 8-1(1) of the ITAA 1997 states that you can deduct from your assessable income any loss or outgoing to the extent that it is incurred in gaining or producing your assessable income.

However, under subsection 8-1(2) of the ITAA 1997, you cannot deduct a loss or outgoing to the extent that, in this case, it is a loss or outgoing of capital, or of a capital nature or it is a loss or outgoing of a private or domestic nature.

As hiring the equipment is directly related to gaining or producing assessable income and is not a loss or outgoing of capital, or of a capital, private or domestic nature, the taxpayer is entitled to claim a deduction for the full cost of hiring the equipment subject to substantiation requirements.