Income Tax Assessment Act 1997
CHAPTER 3
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SPECIALIST LIABILITY RULES
PART 3-10
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FINANCIAL TRANSACTIONS
Division 245
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Forgiveness of commercial debts
Subdivision 245-C
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Calculation of gross forgiven amount of a debt
Guide to Subdivision 245-C
SECTION 245-48
What this Subdivision is about
(a) the value of the debt when it was forgiven is worked out on the basis that you were solvent both then and when you incurred the debt; and
(b) the value of the debt is then offset by any consideration given for the forgiveness of the debt.
View history note
Hide history noteThe amount of forgiveness (called the gross forgiven amount) for the debtor reflects the loss that the creditor makes for tax purposes. It is worked out in 2 steps:
The difference between the value of the debt and the amount offset is the gross forgiven amount.
If the debt was owed by several debtors, the gross forgiven amount is divided between them equally.
| Working out the value of a debt | |
| 245-50 | Extent of forgiveness if consideration is given |
| 245-55 | General rule for working out the value of a debt |
| 245-60 | Special rule for working out the value of a non-recourse debt |
| 245-61 | Special rule for working out the value of a previously assigned debt |
| Working out if an amount is offset against the value of the debt | |
| 245-65 | Amount offset against amount of debt |
| Working out the gross forgiven amount | |
| 245-75 | Gross forgiven amount of a debt |
| 245-77 | Gross forgiven amount shared between debtors |
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