Income tax: property development: are tender costs to be included in the 'estimated profits basis' calculation under Taxation Ruling IT 2450 and spread over the life of a long-term construction contract, or are they deductible under subsection 51(1) of the Income Tax Assessment Act 1936 in the year in which they are incurred?

TD 92/131 clarifies that tender costs are not taken into account for the purposes of the 'estimated profits basis' as explained in Taxation Ruling IT 2450. This Determination explains that whilst tender costs may be attributable to a construction contract, they are severable from it and occur at a time before the beginning of the contract.

TD 92/131 is being withdrawn to form part of a consolidated ruling on the tax treatment of long-term construction contracts.

The issue covered by TD 92/131 is now covered in Taxation Ruling TR 2017/D8.