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Edited version of private advice
Authorisation Number: 1052314414765
Date of advice: 8 October 2024
Ruling
Subject: Commissioner's discretion - deceased estate
Question
Will the Commissioner exercise the discretion under section 118-195 of ITAA 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:
1 July 20XX to 30 June 20XX
The scheme commenced on:
XX XX 20XX
Relevant facts and circumstances
The deceased passed away on XX XX 20XX
The dwelling is located at <Redacted> (the property).
The deceased acquired the property after 20 September 1985.
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.
The deceased's will granted life tenancy to their child. The Supreme Court varied the will to grant a life tenancy to the child.
The child continued to live in the dwelling until the child died on XX XX 20XX.
A tree blew over a dividing fence on the property on XX XX 20XX. A quote for repair was obtained XX XX 20XX. Insurance approved the repair to be undertaken, and fence was repaired and invoiced on XX XX 20XX.
On XX XX 20XX, the property was put on the market for sale, but could not be sold until the fence was repaired.
The executor/trustee of the deceased estate sold the property, and the proceeds of sale are sitting in the deceased estate's bank account.
You entered into a contract to sell the property on XX XX 20XX with settlement occurring on XX XX 20XX.
The delay in disposing of the dwelling was caused by the life tenancy and the property was marketed and sold as soon as was practicable after the death of the child.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 118-195