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Edited version of private advice
Authorisation Number: 1051817871574
Date of advice: 23 March 2021
Ruling
Subject: Deceased estate - extension to the two-year period
Question
Will the Commissioner allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain you make on the disposal?
Answer
Yes.
Having considered your circumstances and the relevant factors, the Commissioner will allow an extension of time. Further information about this discretion can be found by searching 'QC 52250' on ato.gov.au
This ruling applies for the following periods:
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ended 30 June 20XX
Year ending 30 June 20XX
The scheme commences on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away during the year ended 30 June 20XX.
You inherited the deceased's main residence (the property).
Shortly after the deceased's passing, the property was flooded by a faulty hot water system.
The flooding caused extensive damage to the property and required a complete strip out of the entire property due to mould and water damage.
An insurance claim was lodged on the day the flooding was discovered, in order to rectify the damage.
XX months after you lodged the claim you received notification that your insurance repairs claim was approved to commence your repair.
XX months after the approval you received an update from the builder completing the repairs that to date the completed works were installation of plastering and drywall and the tiles for the walls and floor had been ordered. Ongoing works included cabinets and waterproofing and future works included carpentry fix out materials order, painting and decorating, electrical isolate and reconnect, plumbing isolation and fit off and final builders clean.
XX months after the flooding was discovered you received an email from your insurance company advising your repairs were completed.
You immediately listed the property for sale with a local real estate agency.
The area the property was in was experiencing a severe drought which contributed to the length of time for the property to be sold.
A contract was signed, and the sale of the property settled on XX years after the deceased's passing.
The property was not used to generate assessable income.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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