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 expenditure

SECTION 245-145   Remaining total net forgiven amount is applied in reduction of expenditure  

245-145(1)  


The *total net forgiven amount (if any) remaining after being applied under sections 245-115 and 245-130 is applied, to the maximum extent possible, in reduction, in accordance with sections 245-150 , 245-155 and 245-157 , of your expenditure that:


(a) is mentioned in the following table (other than expenditure covered by subsection (2)) and was incurred by you before the *forgiveness income year; and


(b) apart from this Subdivision, could be deducted by you for the forgiveness income year or a later income year if no event or circumstance (other than a *recoupment of the expenditure by you in the forgiveness income year) occurred that would affect its deductibility.


Table of expenditure
Item Column 1
General description of expenditure
Column 2
Provision under which a deduction is available for the expenditure
1 Expenditure deductible under Division 40 (Capital allowances) Division 40 of this Act
2 Expenditure incurred in * borrowing money to produce assessable income Section 25-25 of this Act
3 Expenditure on scientific research Subsection 73A(2) of the Income Tax Assessment Act 1936
4 Expenditure deductible under Division 355 (R & D) Division 355 of this Act
5 Advance revenue expenditure Subdivision H of Division 3 of Part III of the Income Tax Assessment Act 1936
6 Expenditure on acquiring a unit of industrial property to produce assessable income Subsection 124M(1) of the Income Tax Assessment Act 1936
7 Expenditure on Australian films Section 124ZAFA of the Income Tax Assessment Act 1936
8 Expenditure on assessable income-producing buildings and other capital works Section 43-10 of this Act

Note:

If the asset to which the expenditure relates was disposed of, lost or destroyed before 28 June 1996 or the expenditure was recouped before 28 June 1996, see section 245-10 of the Income Tax (Transitional Provisions) Act 1997 .

245-145(2)  
Expenditure is covered by this subsection if:


(a) it was incurred in respect of an asset you *disposed of to an entity that you dealt with at *arm ' s length in respect of the disposal; and


(b) the disposal occurred during the *forgiveness income year before the *forgiveness of any debt owed by you, and the forgiveness resulted in a *net forgiven amount; and


(c) no provision of this Act includes an amount in your assessable income, or allows you a deduction, as a result of the disposal.


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