• What about the commercial debt forgiveness provisions?

    The commercial debt forgiveness provisions in Schedule 2C of the Income Tax Assessment Act 1936 do not apply to a debt forgiveness treated as a dividend under Division 7A to the extent it is included in your assessable income.

     

    Attention

    If not all of the debt forgiven is included in your assessable income because the amount treated as a dividend is reduced by the private company's distributable surplus, the commercial debt forgiveness provisions may apply to the amount of the debt forgiven that was not included in your assessable income.

    End of attention
      Last modified: 12 Aug 2010QC 17349