INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 245 - Forgiveness of commercial debts  

Subdivision 245-E - Application of net forgiven amounts  

Reduction of cost bases of assets

SECTION 245-175   Remaining total net forgiven amount is applied in reduction of cost bases of CGT assets  

245-175(1)  
The *total net forgiven amount (if any) remaining after being applied under sections 245-115 , 245-130 and 245-145 is applied, to the maximum extent possible, in reduction, in accordance with sections 245-180 to 245-190 , of the *cost base and *reduced cost base of your *CGT assets.

245-175(2)  
Subsection (1) does not apply to the following *CGT assets:


(a) a *pre-CGT asset;


(b) a CGT asset you *acquire after the start of the *forgiveness income year;


(c) a *personal use asset;


(d) a *dwelling that was your main residence at any time before the forgiveness income year;


(e) goodwill;


(f) a right of yours covered by section 118-305 (which exempts from CGT certain rights relating to a superannuation fund or approved deposit fund);


(g) a CGT asset that, throughout the period before the forgiveness income year when it was owned by you, was your *trading stock;


(h) a CGT asset if:


(i) expenditure by you (of a kind which is subject to reduction under section 245-145 ) relates to the asset; and

(ii) a *CGT event in relation to the asset would result in an amount being included in your assessable income, or in you being able to deduct an amount;


(i) if you are a foreign resident at the beginning of the forgiveness income year - an asset of yours that is not *taxable Australian property.


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