INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 245 - Forgiveness of commercial debts  

Subdivision 245-F - Special rules relating to partnerships  

Operative provisions

SECTION 245-215   Unapplied total net forgiven amount of a partnership is transferred to partners  

245-215(1)  
This section applies if any part (the residual amount ) of the *total net forgiven amount in relation to a partnership in respect of the *forgiveness income year remains after the total net forgiven amount has been applied in accordance with Subdivision 245-E .

245-215(2)  
If there is a *net income in relation to the partnership in respect of the *forgiveness income year:


(a) each partner is taken to have had a debt *forgiven during the forgiveness income year; and


(b) there is taken to be, in respect of the debt of each partner, a *net forgiven amount worked out in accordance with the following formula:


Partner ' s share of net income × Residual amount
Net income

where:

partner ' s share of net income
means the part of the net income of the partnership for the forgiveness income year that is included in the partner ' s assessable income.

245-215(3)  
If there is a *partnership loss in relation to the partnership in respect of the *forgiveness income year:


(a) each partner is taken to have had a debt *forgiven during the forgiveness income year; and


(b) there is taken to be, in respect of the debt of each partner, a *net forgiven amount worked out in accordance with the following formula:


Partner ' s share of partnership loss × Residual amount
Partnership loss

where:

partner ' s share of partnership loss
means the part of the partnership loss that the partner has deducted or can deduct.

245-215(4)  
The *total net forgiven amount of a partner for the *forgiveness income year as worked out under subsection 245-105(1) includes the *net forgiven amount worked out in relation to the partner under this section.

245-215(5)  
This section has effect in relation to a partnership irrespective of any agreement between the partners as to the operation of this section.


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