Commonwealth Consolidated Acts

INCOME TAX ASSESSMENT ACT 1997 - SECT 116.50

  (1)   The * capital proceeds from a * CGT event are reduced by:

  (a)   any part of them that you repay; or

  (b)   any compensation you pay that can reasonably be regarded as a repayment of part of them.

However, the capital proceeds are not reduced by any part of the payment that you can deduct.

Example:   You sell a block of land for $50,000 (the capital proceeds). The purchaser later finds out that you misrepresented a term in the contract. The purchaser sues you and the court orders you to pay $10,000 in damages to the purchaser.

  The capital proceeds are reduced by $10,000.

  (2)   The payment can include giving property: see section   103 - 5.