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Edited version of private advice
Authorisation Number: 1052082941780
Date of advice: 1 February 2023
Ruling
Subject: Commissioner's discretion - deceased estates
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 you owned as trustee of the deceased estate 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:
The year ending 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
The deceased passed away on DD/MM/YYYY.
The deceased jointly acquired the dwelling on the property (the property) before 20 September 1985 with their spouse.
Their spouse passed away years later, and the deceased acquired their spouse's ownership interest in the property by survivorship.
The property was the main residence of the deceased 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.
Probate of the deceased's will was granted to one of the deceased's children (the Executor).
Within the two-year period following the deceased's death, the Executor experienced medical issues and was hospitalised numerous times.
Due to the Executor's medical issues, their mobility was limited.
COVID-19 restrictions impacted the Executor's ability to attend the property and prepare it for sale.
After the deceased's death, severe weather conditions caused damage to the property.
The Executor filed a claim with the property's insurer for the repair of the property. The insurer rejected the claim and the property was sold in its damaged state.
After a real estate agent was engaged, the property was passed in at auction and failed to sell.
A contract for sale of the property was subsequently entered into, with settlement occurring DD/MM/YYYY.
The property was sold for less than its market valuation.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 118-195