(1) The * capital proceeds from a * CGT event are reduced if:
(a) you are not likely to receive some or all (the unpaid amount ) of those proceeds; and
(b) this is not because of anything you (or your * associate) have done or omitted to do; and
(c) you took all reasonable steps to get the unpaid amount paid.
The capital proceeds are reduced by the unpaid amount.
Note: This rule exists because the general rules treat you as having received an amount when you are entitled to receive it.
Example You sell a painting to another entity for $5,000 (the capital proceeds). You agree to accept monthly instalments of $100.
You receive $2,000, but then the other entity stops making payments. It becomes clear that you are not likely to receive the remaining $3,000. The capital proceeds are reduced to $2,000.
(2) There is a further consequence if:
(a) those proceeds are reduced by the unpaid amount; but
(b) you later receive a part of that amount.
Those proceeds are increased by that part.
(3) This Part and Part 3-3 apply to the debt owed to you (the unpaid amount) as if it were not a * CGT asset.