♣ Most expenses are deductible under the conditions of s8-1 these are described as outgoings such as advertising expenses, wages ♣ Outgoings are seen to be voluntary actions of the part of the tax payer ♣ Losses are more difficult to define they can include loss of value from sale, up to loss through fire or theft (Charles Moore & co v FCT: Loss due to theft of sale receipt when banking them) ♣ whether or not the loss was on revenue account or capital account should be considered ♣ a new loss is deductible as a net amount may enter assessable income as ordinary income ♣ for a loss or outgoing to apply it must follow similar reasoning to inclusion of income hence deduction incurred by one entity on another’s behalf will not satisfy exceptions to this rule: parent controls a subsidiary’s affairs, and is in a position to channel its resources in preferred directions. Secondly the expenditure of the shareholder is directly related