This is a hypothetical question for study purposes:
If a small business on an accruals basis is sold and bad debts are afterwards claimed as deductions in the same financial year, is it better to use 25-35 or 8-1 of ITAA(97)? I understand that one is more advantageous but I don’t know which one or why.Here is a hypothetical response.
Clarifications needed.
1) What is the trading entity (sole trader, company ?).
2) Is just the business being sold, as opposed to a company that conducts the business ?
3) If the business is being purchased (rather than a company conducting the business), has the purchaser also purchased the book debts ? Alternatively, has beneficial ownership of those debts remained with the vendor ?
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