If a gain that you make from a * financial arrangement arises from the * forgiveness of a debt to which Subdivisions 245 - C to 245 - G apply, the gain is reduced by:
(a) if section 245 - 90 (about agreements to forgo capital losses or deductions) applies--the debt's provisional net forgiven amount mentioned in that section; or
(b) if that section does not apply--the debt's * net forgiven amount.
Note: Section 51AAA (about a net capital gains limit) of the
Income Tax Assessment Act 1936 also has the effect of preventing you from
deducting losses.