Income Tax Assessment Act 1997
This section sets out the condition that a company must meet to be able to deduct a debt or part of a debt that it writes off as bad in the *current year if:
(i) the company fails to meet a condition in subsection 165-123(2) , (3) or (4) ; or
(ii) it is not practicable to show that the company meets the conditions in those subsections; and
(b) paragraph 165-120(1)(b) (about the Commissioner thinking it is unreasonable to require the company to meet the conditions in section 165-123 ) does not apply.
The company must satisfy the *business continuity test for the *second continuity period (the business continuity test period ). Apply the test to the *business the company carried on immediately before the time (the test time ) shown in the relevant item of the table.
|Item||If:||The test time is:|
|1||It is practicable to show there is a period that meets these conditions:
(a) the period starts at the start of the *first continuity period;
(b) the company would meet the conditions in subsections 165-123(2), (3) and (4) if the period were the *ownership test period for the purposes of this Act
|The latest time that it is practicable to show is in the period|
|2||Item 1 does not apply and either:
(a) the debt was incurred before the *current year; or
(b) the company came into being during the current year
|The end of the day on which the debt was incurred|
|3||All these conditions are met:
(a) item 1 does not apply;
(b) the debt was incurred in the *current year;
(c) the company was in being throughout the current year
|The start of the current year|
For the business continuity test: see Subdivision 165-E .
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