INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 230 - Taxation of financial arrangements  

Subdivision 230-I - Other provisions  

SECTION 230-522   Adjusting a gain or loss that gives rise to a hybrid mismatch  

230-522(1)  
This section applies if a provision of Division 832 would, apart from section 832-785 , apply to make not allowable an amount (the relevant amount ) that is all or a part of the deduction for:


(a) a loss from a *Division 230 financial arrangement; or


(b) an amount treated under section 832-790 as a separate loss from a Division 230 financial arrangement.

230-522(2)  
The following have effect:


(a) if (disregarding section 832-790 ) you made a loss from the *financial arrangement, and the relevant amount does not exceed the amount of the loss - the amount of the loss you made is reduced by the relevant amount;


(b) if (disregarding section 832-790 ) you made a loss from the financial arrangement, and the relevant amount exceeds the amount of the loss:


(i) you do not make a loss from the financial arrangement; and

(ii) instead, you make a gain from the financial arrangement equal to the amount of the excess;


(c) if (disregarding section 832-790 ) you made a gain from the financial arrangement - the amount of the gain is increased by the relevant amount.

230-522(3)  
The effect of subsection (2) is to be disregarded for the purposes of paragraph (c) of step 1 and paragraph (c) of step 2 of subsection 230-445(1) (about balancing adjustments).


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