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INCOME TAX ASSESSMENT ACT 1997 - SECT 104.210

Bankrupt pays amount in relation to debt: CGT event K2

  (1)   CGT event K2 happens if:

  (a)   you made a * net capital loss for an income year that, because of subsection   102 - 5(2), cannot be applied in working out whether you made a * net capital gain for the income year or a later one; and

  (b)   you make a payment in an income year (the payment year ) in respect of a debt that was taken into account in working out the amount of that net capital loss; and

  (c)   ignoring subsection   102 - 5(2), some part of the net capital loss (the denied part ) would have been applied (if you had made sufficient * capital gains) in working out whether you had made a * net capital gain for the payment year.

The payment can include giving property: see section   103 - 5.

  (2)   The time of the event is when you make the payment.

  (3)   You make a capital loss equal to the smallest of:

  (a)   the amount you paid; or

  (b)   that part of it that was taken into account in working out the denied part; or

  (c)   the denied part   less the sum of * capital losses you made as a result of previous payments you made in respect of the debt that was taken into account in working out the denied part.

  (4)   In calculating that capital loss , disregard any amount you have received as * recoupment of the payment and that is not included in your assessable income.


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