Income Tax Assessment Act 1997

CHAPTER 3 - SPECIALIST LIABILITY RULES  

PART 3-1 - CAPITAL GAINS AND LOSSES: GENERAL TOPICS  

Division 110 - Cost base and reduced cost base  

Subdivision 110-A - Cost base  

What does not form part of the cost base

SECTION 110-37   Expenditure forming part of cost base or element  

110-37(1)    
If a later provision of this Subdivision says that:

(a) certain expenditure does not form part of the *cost base of a *CGT asset; or

(b) the cost base is reduced by certain expenditure;

the expenditure is initially included in the cost base, which is then reduced by the amount of the expenditure just before a *CGT event happens in relation to the asset.

Note:

This has the effect of recognising in the cost base any indexed component relating to the expenditure.

110-37(2)    
On the other hand, if such a provision says that:

(a) certain expenditure does not form part of one or more elements of the *cost base of a *CGT asset; or

(b) one or more elements of the cost base are reduced by certain expenditure;

the expenditure is never included in the relevant elements of the cost base.

Note:

This has the effect of not recognising to any extent this expenditure in the cost base.