Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-10 - FINANCIAL TRANSACTIONS  

Division 245 - Forgiveness of commercial debts  

Subdivision 245-E - Application of net forgiven amounts  

Reduction of cost bases of assets

SECTION 245-190   Reduction of the relevant cost bases of a CGT asset  

245-190(1)    
Subject to subsection (3), if you choose to apply an amount in reduction of the *cost base and *reduced cost base of a particular *CGT asset, the cost base and reduced cost base of the asset, as at any time on or after the beginning of the *forgiveness income year, are reduced by that amount.

245-190(2)    
The reduction by a particular amount of the *cost base and *reduced cost base of a particular *CGT asset is, for the purpose of working out the amount by which the *total net forgiven amount remaining is applied, taken to be a reduction by the particular amount (and not by the sum of the amounts by which those cost bases are reduced).

245-190(3)    
The maximum amount by which the *cost base and *reduced cost base of a *CGT asset may be reduced is the amount that, apart from sections 245-175 to 245-185 , would be the reduced cost base of the asset calculated as if a *CGT event had happened to the asset:

(a) subject to paragraph (b), on the first day of the *forgiveness income year; or

(b) if, after the beginning of that income year, an event occurred that would cause the reduced cost base of the asset to be reduced - on the day on which the event occurred;

and the asset had been *disposed of at its *market value on the day concerned.