Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 118 - Exemptions  

Subdivision 118-I - Look-through earnout rights  

SECTION 118-580   Temporarily disregard capital losses affected by look-through earnout rights  

118-580(1)  
Temporarily disregard a portion of a *capital loss you make from *disposing of a *CGT asset if the capital loss could be reduced by you receiving one or more *financial benefits under a *look-through earnout right relating to the CGT asset and the disposal.

118-580(2)  
The portion of the *capital loss that is temporarily disregarded is:


(a) if those *financial benefits can never exceed a maximum amount that is certain - so much of the capital loss as is equal to that maximum amount; or


(b) otherwise - all of the capital loss.

Note:

When you receive a financial benefit under the look-through earnout right:

  • (a) you cease to disregard under this section a portion of your loss related to the amount of that financial benefit; and
  • (b) your capital proceeds for the disposal increase (see paragraph 116-120(1)(b) ), causing a reduction in the amount of your loss.

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