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INCOME TAX ASSESSMENT ACT 1997 - SECT 40.645

Electricity and telephone lines

             (1)  You can deduct amounts for capital expenditure you incur on * connecting power to land or upgrading the connection if, when you incur the expenditure:

                     (a)  you have an interest in the land or are a share-farmer carrying on a * business on the land; and

                     (b)  you or another entity intends to use some or all of the electricity to be supplied as a result of the expenditure in carrying on a business on the land for a * taxable purpose at a time when you have an interest in the land or are a share-farmer carrying on a business on the land.

             (2)  You can also deduct amounts for capital expenditure you incur on a telephone line on or extending to land if, when you incurred the expenditure:

                     (a)  a * primary production business was carried on the land; and

                     (b)  you had an interest in the land or you were a share-farmer carrying on a primary production business on the land.

             (3)  The amount you can deduct is 10% of the expenditure:

                     (a)  for the income year in which you incur it; and

                     (b)  for each of the next 9 income years.

Note 1:       Various provisions may reduce the amount you can deduct or stop you deducting. For example, see:

*           Division 26 (limiting deductions generally); and

*           section 40-650 (specifying expenditure you cannot deduct under this Subdivision); and

*           Division 245 (which may affect your entitlement to a deduction if your debts are forgiven).

Note 2:       If you recoup an amount of the expenditure, the amount will be included in your assessable income. See Subdivision 20-A.



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