Income Tax Assessment Act 1997
SECTION 727-630 How cap in section 727-625 applies if affected interest is also trading stock or a revenue asset 727-630(1)
This section affects how to work out the total gain reductions and the total loss reductions for the purposes of section 727-625 if:
(a) a * realisation event covered by that section happens to an * equity or loan interest, or to an * indirect equity or loan interest, in the * losing entity or in the * gaining entity; and
(b) the interest is also * trading stock or a * revenue asset at the time of the event.
Trading stock
727-630(2)
In the case of an * equity or loan interest, or an * indirect equity or loan interest, in the * losing entity that is * trading stock at that time:
(a) the amount (if any) by which section 727-615 or 727-850 reduces a loss worked out under section 977-25 or 977-30 (about realisation events for trading stock) that would, apart from this Division, be * realised for income tax purposes by the event is taken into account; and
(b) the amount (if any) by which section 727-615 or 727-850 reduces a loss worked out under section 977-10 (about realisation events for CGT assets) that would, apart from this Division, be * realised for income tax purposes by the event is not taken into account;
in working out the total loss reductions.
727-630(3)
In the case of an * affected interest in the * gaining entity that is * trading stock at that time:
(a) the amount (if any) by which section 727-620 reduces a gain worked out under section 977-35 or 977-40 (about realisation events for trading stock) that would, apart from this Division, be * realised for income tax purposes by the event is taken into account; and
(b) the amount (if any) by which section 727-620 reduces a gain worked out under section 977-15 (about realisation events for CGT assets) that would, apart from this Division, be * realised for income tax purposes by the event is not taken into account;
in working out the total gain reductions.
Revenue asset
727-630(4)
In the case of an * equity or loan interest, or an * indirect equity or loan interest, in the * losing entity that is a * revenue asset at that time, the greater of the following is taken into account in working out the total loss reductions:
(a) the amount (if any) by which section 727-615 or 727-850 reduces a loss worked out under section 977-55 (about realisation events for revenue assets) that would, apart from this Division, be * realised for income tax purposes by the event;
(b) the amount (if any) by which section 727-615 or 727-850 reduces a loss worked out under section 977-10 (about realisation events for CGT assets) that would, apart from this Division, be * realised for income tax purposes by the event.
727-630(5)
In the case of an * affected interest in the * gaining entity that is a * revenue asset at that time, the greater of the following amounts is taken into account in working out the total gain reductions:
(a) the amount (if any) by which section 727-620 reduces a gain worked out under section 977-55 (about realisation events for revenue assets) that would, apart from this Division, be * realised for income tax purposes by the event;
(b) the amount (if any) by which section 727-620 reduces a gain worked out under section 977-15 (about realisation events for CGT assets) that would, apart from this Division, be * realised for income tax purposes by the event.
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