To arrive at their taxable income for an income year, taxpayers subtract their deductions from their assessable income. Most deductions fall within the general deduction provision in s 8-1 ITAA97. Section 8-1 replaces former s 51(1) ITAA36, which was drafted in similar terms, but was rewritten in 1997 as a consequence of the TLIP rewrite. This chapter examines the general deduction provision and the extensive body of case law that has considered it. Section 8-1 has two positive limbs and four negative limbs. This chapter commences with a discussion of the nature of a loss or outgoing followed by a detailed discussion of the positive and negative limbs of s 8-1. The meaning of the term ‘incurred’ and issues relating to the timing of deductions are examined. The chapter then builds on this framework to explore how the general deduction provision has been applied to some common kinds of losses and outgoings. It focuses on clothing, travel, management, self-education, home office, rent and licence fees, interest, legal and trade-tie expenses.

This chapter addresses two types of monetary remedies for patent infringement: (1) recovery of the patentee’s lost profits and (2) disgorgement of the infringer’s profits.  Both remedies make a comparison between what actually happened and a hypothetical “but for” world in which no infringement occurred. But the two remedies have substantially different objectives:  Lost profits are intended to compensate the patentee by restoring it to the position it would have occupied absent infringement, while disgorgement may serve other purposes, including deterrence, recapturing wrongful gains, and encouraging ex ante licensing of patented technology. Section 1 addresses several key issues regarding lost profits awards, including the availability and standard of proof, the role of noninfringing alternatives, potential recovery for the sale of related but unpatented goods, whether and how to apportion lost profits awards for complex products, and potential recovery for other infringement-related harms.  Section 2 describes the justifications for, and availability of, the disgorgement (accounting) remedy in major patent systems and, additionally, analyzes a number of questions related to calculating such awards. In both sections, recommendations are made and areas for further research are identified.