Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 112 - Modifications to cost base and reduced cost base  

Subdivision 112-A - General modifications  

SECTION 112-35  

112-35   Assumption of liability rule  
If you * acquire a * CGT asset from another entity that is subject to a liability, the first element of your * cost base and * reduced cost base of the asset includes the amount of the liability you assume.

Example:

You acquire a block of land for $ 150,000. You pay $ 50,000 and assume a liability for an outstanding mortgage of $ 100,000. The first element of your cost base and reduced cost base is $ 150,000.

Note:

The first element of cost base is dealt with in subsection 110-25(2) . The first element of reduced cost base is the same: see subsection 110-55(2) .