INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-5 - CORPORATE TAXPAYERS AND CORPORATE DISTRIBUTIONS  

Division 165 - Income tax consequences of changing ownership or control of a company  

Subdivision 165-B - Working out the taxable income and tax loss for the income year of the change  

Working out the company's tax loss

SECTION 165-70   How to calculate the company's tax loss for the income year  

165-70(1)  
The company's tax loss for the income year is calculated as follows.

165-70(2)  
Total the *notional losses worked out under section 165-50 or 165-75 .

165-70(3)  
Add to the total in subsection (2) the amount (if any) by which the company's *full year deductions of these kinds:


(a) deductions for bad debts under section 8-1 (about general deductions) or section 25-35 (about bad debts);


(b) (Omitted by No 121 of 1997)


(c) deductions, so far as they are allowable under Division 8 (which is about deductions) because Subdivision H (Period of deductibility of certain advance expenditure) of Division 3 of Part III of the Income Tax Assessment Act 1936 applies to the company in relation to the income year;

exceed the total of:


(d) the *notional taxable incomes (if any); and

To work out the notional taxable income: see section 165-50 .


(e) the *full year amounts referred to in section 165-60 (if any); and


(f) any *net capital gain of the company for the income year.

165-70(4)  
If the company *derived exempt income, subtract its *net exempt income (worked out under section 36-20 ).

165-70(5)  
Any amount remaining is the company's tax loss for the income year, which is called a loss year .

Note:

The meanings of tax loss and loss year are modified by section 36-55 for a corporate tax entity that has an amount of excess franking offsets.

To find out how much of the tax loss can be deducted in later income years: see Subdivision 165-A .

To find out how to deduct it: see section 36-17 .


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