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Edited version of private advice
Authorisation Number: 1052340171957
Date of advice: 19 December 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise the discretion under section 118-195 of the Income Tax Assessment Act 1997 to allow an extension of time for you to dispose of your ownership interest in the dwelling and disregard the capital gain or capital loss you made on the disposal?
Answer
Yes.
Having considered your circumstances and the relevant factors the Commissioner will allow an extension of time. Further information about the Commissioner's discretion can be found by searching ato.gov.au for 'QC 66057'.
This ruling applies for the following period:
Year ending 30 June 20XX
The scheme commenced on:
DD MM 20YY
Relevant facts and circumstances
The deceased passed away on DD MM 20YY.
The property is located at XXXX (the property).
The deceased acquired the property after 20 September 1985.
The property was the main residence of the deceased (under the absence rule for Capital Gains Tax purposes) just before they passed away and was not used to produce assessable income at that time.
The property was situated on less than two hectares of land.
The deceased had moved out of the property shortly before they passed away and was in a health care facility at the time they passed away.
Shortly before the deceased's passing, the family of the deceased was approached by an acquaintance of the deceased who expressed interest in their family member (Person A) purchasing the property. A purchase price was agreed upon by all parties involved.
Following the deceased's passing away, the property could not be sold until probate was granted.
Probate was required in two states to enable sale of the property which took additional time. This was granted on DD MM 20YY.
At the time the final probate was granted, Person A was beginning the process of applying for finance to purchase the property.
Following the financing application process, it was found that Person A would not be able to receive financing to purchase the property.
Consequently, a real estate agent was engaged to sell the property.
Settlement for the sale of the property took place less than 3 months after the expiry of the 2 year period.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195
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