Income Tax Assessment Act 1997
The Commissioner may *disallow a *capital loss of a company for an income year to the extent that the company would not have made the loss if it had not also made some or all of a *capital gain it made in that income year.
The disallowance may result in a tax loss for the income year: see section 175-75 .175-65(2)
The Commissioner cannot *disallow any of the *capital loss if:
(a) the *continuing shareholders will benefit from any profit or advantage that has arisen or might arise directly or indirectly from the loss being made; and
(b) the Commissioner thinks that the extent to which they will benefit is fair and reasonable having regard to their respective *shareholding interests in the company.
Section 175-100 allows the Commissioner to disallow a capital loss of an insolvent company.
The continuing shareholders are the individuals who had *shareholding interests in the company both immediately before the *capital loss was made, and immediately afterwards.
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