Income Tax Assessment Act 1997
The 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|