Commonwealth Consolidated Acts Commonwealth Consolidated ActsThe total of the net forgiven amounts of all your debts forgiven in an income year is applied to reduce 4 classes of amounts that could otherwise reduce your taxable income in the same or a later income year. It is applied in the following order:
(a) to your tax losses from previous income years;
(b) to your net capital losses from previous income years;
(c) to the deductions you would otherwise get in the income year, or in a later income year, because of expenditure from a previous year (for example, the capital allowance deductions you would get for expenditure on acquiring a depreciating asset);
(d) to the cost bases of your CGT assets.
You can choose the order in which the net forgiven amounts reduce the amounts within each class.
If all the amounts in the 4 classes are reduced to nil, any remaining net forgiven amounts are disregarded.
Table of sections
General operative provisions
245 - 100 Subdivision not to apply to calculation of attributable income
245 - 105 How total net forgiven amount is applied
Reduction of tax losses
245 - 115 Total net forgiven amount is applied in reduction of tax losses
245 - 120 Allocation of total net forgiven amount in respect of tax losses
Reduction of net capital losses
245 - 130 Remaining total net forgiven amount is applied in reduction of net capital losses
245 - 135 Allocation of remaining total net forgiven amount in respect of net capital losses
Reduction of expenditure
245 - 145 Remaining total net forgiven amount is applied in reduction of expenditure
245 - 150 Allocation of remaining total net forgiven amount in respect of expenditures
245 - 155 How expenditure is reduced--straight line deductions
245 - 157 How expenditure is reduced--diminishing balance deductions
245 - 160 Amount applied in reduction of expenditure included in assessable income in certain circumstances
Reduction of cost bases of assets
245 - 175 Remaining total net forgiven amount is applied in reduction of cost bases of CGT assets
245 - 180 Allocation of remaining total net forgiven amount among relevant cost bases of CGT assets
245 - 185 Relevant cost bases of investments in associated entities are reduced last
245 - 190 Reduction of the relevant cost bases of a CGT asset
Unapplied total net forgiven amount
245 - 195 No further consequences if there is any remaining unapplied total net forgiven amount