Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 104 - CGT events  

Subdivision 104-K - Other CGT events  

SECTION 104-210   Bankrupt pays amount in relation to debt: CGT event K2  

104-210(1)    
CGT event K2 happens if:

(a) you made a *net capital loss for an income year that, because of subsection 102-5(2) , cannot be applied in working out whether you made a *net capital gain for the income year or a later one; and

(b) you make a payment in an income year (the payment year ) in respect of a debt that was taken into account in working out the amount of that net capital loss; and

(c) ignoring subsection 102-5(2) , some part of the net capital loss (the denied part ) would have been applied (if you had made sufficient *capital gains) in working out whether you had made a *net capital gain for the payment year.

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

104-210(2)    
The time of the event is when you make the payment.

104-210(3)    
You make a capital loss equal to the smallest of:

(a) the amount you paid; or

(b) that part of it that was taken into account in working out the denied part; or

(c) the denied part less the sum of *capital losses you made as a result of previous payments you made in respect of the debt that was taken into account in working out the denied part.

104-210(4)    
In calculating that capital loss , disregard any amount you have received as *recoupment of the payment and that is not included in your assessable income.