INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 245 - Forgiveness of commercial debts  

Guide to Division 245  

SECTION 245-1   245-1   What this Division is about  


When a creditor forgives a commercial debt you owe, you make a gain. This is usually not included in your assessable income. Instead, this Division offsets the forgiven amount against amounts that could otherwise reduce your taxable income in the same or a later income year. Those amounts are:

  • (a) your tax losses and net capital losses; and
  • (b) capital allowances and some similar deductions; and
  • (c) the cost bases of your CGT assets.

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