(1) There is an adjustment under this section for an entity in an income year (the adjustment year ) if:
(a) in an earlier income year, all or part of a deduction of the entity in respect of a payment that gave rise to a * hybrid payer mismatch was not allowable under section 832- 285; and
(b) an amount of * dual inclusion income is:
(i) available to be applied by the * hybrid payer in the adjustment year; and
(ii) * subject to Australian income tax for the purposes of subsection 832-680(1) in the adjustment year; and
(iii) * subject to foreign income tax for the purposes of subsection 832-680(1) in the non-including country identified in subsection 832-320(3).
(2) So much of the amount of * dual inclusion income that satisfies paragraph (1)(b) as does not exceed the amount that was not allowable as a deduction is an amount the entity can deduct in the adjustment year.
(3) For the purposes of a later application of this section, treat the amount that was not allowable as a deduction under section 832- 285 as being reduced by the amount deducted under subsection (2) of this section.
Guide to Subdivision 832-E