Income Tax Assessment Act 1997

CHAPTER 4 - INTERNATIONAL ASPECTS OF INCOME TAX  

PART 4-5 - GENERAL  

Division 775 - Foreign currency gains and losses  

Subdivision 775-B - Realisation of forex gains or losses  

SECTION 775-30   Forex realisation losses are deductible  

Basic rule

775-30(1)    
You can deduct from your assessable income for an income year a *forex realisation loss that you make as a result of a *forex realisation event that happens during that year.

Exceptions

775-30(2)    
However, you cannot deduct a *forex realisation loss under this section to the extent that it:

(a) is a loss of a private or domestic nature; and

(b) is not covered by an item of the table:

Forex realisation losses to which this subsection does not apply
Item	You make the forex realisation loss as a result of this event …	happening to …	and the following condition is satisfied …
1	forex realisation event 2	a right, or a part of a right, created or acquired in return for the occurrence of a *realisation event in relation to a *CGT asset you own, where subparagraph 775-45(1)(b)(iv) applies	a gain or loss that would result from the occurrence of the realisation event in relation to the CGT asset would be taken into account for the purposes of Part 3-1 or 3-3
2	forex realisation event 4	an obligation, or a part of an obligation, you incurred in return for the acquisition of a *CGT asset	a gain or loss that would result from the occurrence of a *realisation event in relation to the CGT asset would be taken into account for the purposes of Part 3-1 or 3-3

Note:

Parts 3-1 and 3-3 deal with capital gains and losses.

775-30(3)    
Section 775-75 provides for additional exceptions.

Note:

Section 775-75 is about the tax consequences of certain short-term forex realisation losses.

No double deductions

775-30(4)    
To the extent that this section and another provision of this Act would allow you a deduction for a *forex realisation loss, you can only deduct the loss under this section.

Note:

Under section 230-20 , foreign exchange losses from a Division 230 financial arrangement are dealt with under Division 230 and not under this Division.