Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-45 - RULES FOR PARTICULAR INDUSTRIES AND OCCUPATIONS  

Division 385 - Primary production  

Subdivision 385-E - Primary producer can elect to spread or defer tax on profit from forced disposal or death of live stock  

Operative provisions

SECTION 385-120   Purchase price of replacement live stock is reduced  

385-120(1)    

If you make the election in section 385-110 , then the amount paid or payable for the purchase of each replacement animal you buy in the ^* disposal year, or in the next 5 income years, is treated as if it were reduced by the ^* reduction amount.

Meaning of reduction amount

385-120(2)    
The reduction amount is:

• so much of the ^* tax profit on the disposal or death as is attributable to live stock of the species you are replacing;

divided by:

• the number of animals of that species that you disposed of or that died.

385-120(3)    
However, if:

(a) you purchase a replacement animal of a different species from the ^* live stock it replaces; and

(b) you pay substantially more for it than you could have paid for a replacement animal of the same species;

the reduction amount for the animal is any reasonable amount at least equal to the amount worked out under subsection (2).

Exception to avoid reducing unused tax profit to less than nil

385-120(4)    

However, if applying subsection (1) to a particular purchase would reduce the ^* unused tax profit on the disposal or death to less than nil, instead reduce the amount paid or payable for the purchase of each replacement animal in that purchase by:

• the ^* unused tax profit on the disposal or death;

divided by:

• the number of animals in the purchase.