INCOME TAX ASSESSMENT ACT 1997
This section applies if:
(a) a *balancing adjustment event happens in an income year (the event year ) for an asset you *held and for which:
(i) you can deduct, for an income year, an amount under section 40-25, as that section applies apart from Division 355 and former section 73BC of the Income Tax Assessment Act 1936; or
(ii) you could have deducted, for an income year, an amount as described in subparagraph (i) if you had used the asset; and
(b) you are entitled under section 355-100 to *tax offsets for one or more income years for deductions (the R&D deductions ) under section 355-305 for the asset.
This section applies in a modified way if you have deductions for the asset under former section 73BA or 73BH of the Income Tax Assessment Act 1936 (see section 40-292 of the Income Tax (Transitional Provisions) Act 1997).
In applying section 40-290 (including references in that section to the reduction of deductions under section 40-25) in relation to the asset, assume that using the asset for a *taxable purpose includes using it for the purpose of conducting the *R&D activities to which the R&D deductions relate. Increase in amounts deductible under section 40-285 40-292(3)
If you are entitled under section 355-100 to a *tax offset for the event year in respect of deductions under Division 355 totalling at least $20,000, any amount (the section 40-285 amount ) you can deduct for the asset under section 40-285 (after applying subsection (2) of this section) for the event year is increased by:
(a) if your *aggregated turnover for the event year is less than $20 million - ½ of the amount worked out under subsection (5) of this section; and
(b) otherwise - 1/3 of the amount worked out under subsection (5) of this section. 40-292(4)
Any amount (the section 40-285 amount ) that is included in your assessable income for the asset under section 40-285 (after applying subsection (2) of this section) for the event year is increased by 1/3 of the amount worked out under subsection (5) of this section. Component of any increase in amounts deductible or assessable 40-292(5)
The amount is worked out as follows:
|Sum of your R&D deductions||×||Adjusted section 40-285 amount|
|Total decline in value|
(a) if the section 40-285 amount is a deduction - the amount of the deduction; or
(b) if the section 40-285 amount is an amount included in your assessable income - so much of the section 40-285 amount as does not exceed the total decline in value.