Income Tax Assessment Act 1997
This section applies in respect of the reduction under section 245-145 of an expenditure of yours, if:
(a) the amount that you could deduct, apart from this Subdivision, in respect of the expenditure is a percentage, fraction or proportion of an amount (the base amount ); and
(b) the base amount is worked out without regard to any amount or amounts you previously deducted in respect of that expenditure. 245-155(2)
The amount of the reduction of the expenditure must not exceed:
(a) the base amount; less
(b) the amount of that part of the expenditure in respect of which you have deducted (disregarding subsection (4)), or can deduct, an amount for any income year before the *forgiveness income year. 245-155(3)
For the purpose of working out your deductions for the *forgiveness income year and later income years, any amount that is applied in reduction of your expenditure is taken to reduce the base amount. 245-155(4)
You are taken to have deducted the amount of the reduction in respect of the expenditure:
(a) before the *forgiveness income year; and
(b) for the purposes of any provision of this Act that includes an amount in your assessable income or allows you a deduction:
(i) because of the *disposal, loss or destruction of the asset in respect of which the expenditure was incurred; or
(ii) because of the *recoupment of any of the expenditure; or
(iii) because use of the asset for a particular purpose has been otherwise terminated; or
(iv) because a *balancing adjustment event occurs for that asset.
The amount of that part of the expenditure in respect of which you have deducted (disregarding subsection (4), or can deduct, an amount for all income years (including income years before the *forgiveness income year) must not exceed the base amount as reduced under subsection (3).