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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

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

Division 110 - Cost base and reduced cost base  

Subdivision 110-B - Reduced cost base  

SECTION 110-60  Reduced cost base for partnership assets  

 ITAA 36

110-60(1)  

The third element of an entity's reduced cost base for its interest in a *CGT asset of a partnership is the entity's share of:


(a) any amounts worked out under whichever of the following subparagraphs applies:

(i) if Division 58 does not apply to the asset - any amount included in the assessable income of the partnership for any income year because of a balancing adjustment for the asset;

(ii) if Division 58 applies to the asset and an amount has been included in the assessable income of the partnership for an income year because of a balancing adjustment for the asset - any part of that amount that was attributable to amounts that the partnership has deducted or can deduct for depreciation of the asset; and
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(b) any amount that would have been so included apart from any of these (which provide relief from including a balancing charge in your assessable income):

(i) section 40-365; or

(ii) any of these former sections - section 42-285, 42-290 or 42-293; or

(iii) former subsection 59(2A) or (2D) of the Income Tax Assessment Act 1936;
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calculated according to the entity's share in the partnership net income or net loss.

110-60(2)  

Expenditure does not form part of an entity's reduced cost base for its interest in a *CGT asset of a partnership to the extent that a partnership in which the entity is or was a partner has deducted or can deduct it (including because of a balancing adjustment), or could have deducted it apart from paragraph 43-70(2)(h).

110-60(3)  

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Expenditure does not form part of an entity's reduced cost base for its interest in a *CGT asset of a partnership to the extent that a partnership in which the entity is or was a partner could have deducted an amount for the asset if it had used it wholly for the *purpose of producing assessable income.

110-60(4)  

Expenditure does not form part of an entity's reduced cost base for its interest in a *CGT asset of a partnership to the extent of any amounts that a partnership in which the entity is or was a partner has received as *recoupment of it and that are not included in the assessable income of the partnership.

110-60(4A)  

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Expenditure does not form part of an entity's reduced cost base for its interest in a *CGT asset of a partnership to the extent that the entity chose a *tax offset for the expenditure under the former section 388-55 (about the landcare and water facility tax offset) instead of deducting it.

110-60(5)  

(Repealed by No 23 of 2005)

110-60(6)  

(Repealed by No 23 of 2005)

110-60(7)  

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The reduced cost base of an entity's interest in a *CGT asset of a partnership is to be reduced by the entity's share of any amount that the partnership has deducted or can deduct, or could have deducted except for Subdivision 170-D, as a result of a *CGT event that happens in relation to the asset. However, a reduction is not to be made for an amount that relates to a cost that could never have formed part of the reduced cost base or is excluded from the reduced cost base as a result of another provision of this section.


 



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