Income Tax Assessment Act 1997
The amount of *debt deduction disallowed under subsection 820-185(1) is worked out using the following formula:
|Debt deduction ×||
(a) the average value, for the income year, of the entity ' s *debt capital that is covered by step 1 of the method statement in subsection 820-185(3) ; and
(b) the average value, for that year, of the entity ' s *cost-free debt capital that is covered by step 4 of that method statement.
means the amount by which the *adjusted average debt (see subsection 820-185(3) ) exceeds the entity ' s *maximum allowable debt for that year.
The disallowed amount also does not form part of the cost base of a CGT asset. See section 110-54 .