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 104-220   CGT asset starts being trading stock: CGT event K4  

104-220(1)    
CGT event K4 happens if:

(a) you start holding as *trading stock a *CGT asset you already own but do not hold as trading stock; and

(b) you elect under paragraph 70-30(1)(a) to be treated as having sold the asset for its *market value.

Note 1:

Paragraph 70-30(1)(a) allows you to elect the cost of the asset, or its market value, just before it became trading stock.

Note 2:

There is an exemption if you elect its cost: see section 118-25 .

104-220(2)    
The time of the event is when you start.

104-220(3)    

You make a capital gain if the asset ' s *market value (just before it became *trading stock) is more than its *cost base. You make a capital loss if that market value is less than its *reduced cost base.

Exception

104-220(4)    
A *capital gain or *capital loss you make is disregarded if you *acquired the asset before 20 September 1985.