INCOME TAX ASSESSMENT ACT 1997
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 .
S 104-210(1) (note) repealed as inoperative by No 101 of 2006 , s 3 and Sch 1 item 234, effective 14 September 2006. For application and savings provisions and for former wording see the CCH Australian Income Tax Legislation archive .
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.