Income Tax Assessment Act 1997
This section applies to an *R & D entity if:
(a) a *balancing adjustment event happens in an income year (the event year ) for an asset *held by the R & D entity; and
(b) the R & D entity cannot deduct an amount under section 40-25 , as that section applies apart from:
(i) this Division; and
for the asset for an income year; and
(ii) former section 73BC of the Income Tax Assessment Act 1936 ;
(c) the R & D entity is entitled under section 355-100 to *tax offsets for one or more income years for deductions (the R & D deductions ) under section 355-305 for the asset; and
(d) the entity is registered under section 27A of the Industry Research and Development Act 1986 for one or more *R & D activities for the event year; and
(e) if Division 40 applied with the changes described in section 355-310 :
(i) the entity could deduct for the event year an amount under subsection 40-285(2) for the asset and the balancing adjustment event; or
(ii) an amount would be included in the entity's assessable income for the event year under subsection 40-285(1) for the asset and the balancing adjustment event.
This section applies in a modified way if the entity also has deductions for the asset under former section 73BA or 73BH of the Income Tax Assessment Act 1936 (see section 355-320 of the Income Tax (Transitional Provisions) Act 1997 ).
If the *R & D entity could deduct for the event year an amount under subsection 40-285(2) for the asset and the event if Division 40 applied as described in paragraph (1)(e), the R & D entity can deduct that amount for the event year.
A deduction under this subsection is not a notional deduction (see subsection 355-105(2) ).
A deduction under this subsection results in a catch up amount for the R & D entity (see section 355-465 ).
If an amount would be included in the *R & D entity ' s assessable income for the event year under subsection 40-285(1) for the asset and the event if Division 40 applied as described in paragraph (1)(e), that amount is included in the R & D entity ' s assessable income for the event year.
Some or all of the amount included in the R & D entity ' s assessable income may result in a clawback amount for the R & D entity (see section 355-446 ).
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