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Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 104 - CGT events  

Subdivision 104-K - Other CGT events  

SECTION 104-240  Working out capital gain or loss for CGT event K7: general case  

 View history reference [No equivalent]

104-240(1)  

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You make a capital gain if the *termination value of the *depreciating asset covered by subsection 104-235(1) or (1B) is more than its *cost. The amount of the *capital gain is:

Graphic


where:

sum of reductions is the sum of:


(a) if the *depreciating asset is covered by subsection 104-235(1) - the reductions in your deductions for the asset under sections 40-25 and 40-27 ; or


(b) if the depreciating asset is covered by subsection 104-235(1B) - the reductions that would have been required under section 40-25 on the assumption that using the asset for a *taxable purpose included using it for the purpose of conducting *R & D activities for which you were registered under section 27A of the Industry Research and Development Act 1986 .

total decline is the decline in value of the *depreciating asset since you started to *hold it.

Note 1:

This subsection applies in a modified way if you used the asset for the purpose of carrying on research and development activities (within the meaning of former section 73B of the Income Tax Assessment Act 1936 ): see section 104-235 of the Income Tax (Transitional Provisions) Act 1997 .

Note 2:

The CGT concepts of cost base and capital proceeds are not relevant for this event.

104-240(2)  

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You make a capital loss if the *cost of the *depreciating asset covered by subsection 104-235(1) or (1B) is more than its *termination value. The amount of the *capital loss is:

Graphic


where:

sum of reductions and total decline have the same meanings as in subsection (1).

104-240(3)  

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In applying subsection (1) or (2) , reduce the *termination value of the *depreciating asset by so much of an amount misappropriated by your employee or *agent (whether by theft, embezzlement, larceny or otherwise) as represents an amount applicable to you under:


(a) item 8 of the table in subsection 40-300(2) ; or


(b) item 1, 3, 4 or 6 of the table in subsection 40-305(1) ;

in relation to the *balancing adjustment event.

104-240(4)  

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If you later receive an amount as *recoupment of all or part of the amount misappropriated, the amount applicable under subsection (3) is increased by the amount received.

104-240(5)  

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Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purposes of giving effect to this section for an income year if:


(a) you discover the misappropriation, or you receive an amount as *recoupment of all or part of the amount misappropriated, after you lodged your *income tax return for the income year; and


(b) the amendment is made at any time during the period of 4 years starting immediately after you discover the misappropriation or receive the amount.


 



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