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INCOME TAX ASSESSMENT ACT 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-10 - CAPITAL ALLOWANCES: RULES ABOUT DEDUCTIBILITY OF CAPITAL EXPENDITURE  

Division 40 - Capital allowances    View history reference

Subdivision 40-D - Balancing adjustments    View history reference

Operative provisions

SECTION 40-293  Adjustments - partnership assets used for both general tax purposes and R&D activities  

 View history reference

40-293(1)  

This section applies to an *R&D partnership if:


(a) a *balancing adjustment event happens in an income year (the event year) for a *depreciating asset *held by the R&D partnership and for which:


(i) the R&D partnership can deduct, for an income year, an amount under section 40-25, as that section applies apart from Division 355 and former section 73BC of the Income Tax Assessment Act 1936; or

(ii) the R&D partnership could have deducted, for an income year, an amount as described in subparagraph (i) if it had used the asset; and


(b) one or more partners of the R&D partnership are entitled under section 355-100 to *tax offsets for one or more income years for deductions (the R&D deductions) under section 355-520 for the asset.

Note:

This section applies in a modified way if the partners have deductions for the asset under former section 73BA or 73BH of the Income Tax Assessment Act 1936 (see section 40-293 of the Income Tax (Transitional Provisions) Act 1997).

Section 40-290 to be applied as if use for conducting R&D activities were use for a taxable purpose

40-293(2)  

In applying section 40-290 (including references in that section to the reduction of deductions under section 40-25) in relation to the asset, assume that using the asset for a *taxable purpose includes using it for the purpose of conducting the *R&D activities to which the R&D deductions relate.

Increase in amounts deductible or assessable under section 40-285

40-293(3)  

Any amount (the section 40-285 amount):


(a) that the *R&D partnership can deduct for the asset under section 40-285 (after applying subsection (2) of this section) for the event year; or


(b) that is included in the R&D partnership's assessable income for the asset under section 40-285 (after applying subsection (2) of this section) for the event year;

is increased by 1/3 of the following amount:
Sum of all R&D deductions×Adjusted section 40-285 amount
Total decline in value

where:

adjusted section 40-285 amount means:


(a) if the section 40-285 amount is a deduction - the amount of the deduction; or


(b) if the section 40-285 amount is an amount included in the *R&D partnership's assessable income - so much of the section 40-285 amount as does not exceed the total decline in value.

total decline in value means the *cost of the asset less its *adjustable value.


 



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