Document ID: chunk:federal_register_of_legislation:C2025C00029:section:2:p20
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 2 (pt 20/22)
Character Range: 2195012–2197711

capital proceeds are not reduced by any part of the payment that you can deduct.
Example: You sell a block of land for $50,000 (the capital proceeds). The purchaser later finds out that you misrepresented a term in the contract. The purchaser sues you and the court orders you to pay $10,000 in damages to the purchaser.
 The capital proceeds are reduced by $10,000.
 (2) The payment can include giving property: see section 103‑5.

116‑55  Assumption of liability rule: modification 5
  The *capital proceeds from a *CGT event are increased if another entity *acquires the *CGT asset (the subject of the event) subject to a liability by way of security over the asset.
  They are increased by the amount of the liability the other entity assumes.
Example: You sell land for $150,000. You receive $50,000 (the capital proceeds) and the buyer becomes responsible for a $100,000 liability under an outstanding mortgage. The capital proceeds are increased by $100,000 to $150,000.

116‑60  Misappropriation rule: modification 6
 (1) The *capital proceeds from a *CGT event are reduced if your employee or *agent misappropriates (whether by theft, embezzlement, larceny or otherwise) all or part of those proceeds.
Note: This rule exists because the general rules treat you as having received an amount when you are entitled to receive it.
 (2) The *capital proceeds are reduced by the amount misappropriated.
 (3) There is a further consequence if:
 (a) those proceeds are reduced by the amount misappropriated; and
 (b) you later receive an amount as *recoupment of all or part of the amount misappropriated.
Those proceeds are increased by the amount received.
 (4) This Part and Part 3‑3 apply to the debt owed to you (the amount misappropriated) as if it were not a *CGT asset.
 (5) Section 170 of the Income Tax Assessment Act 1936 does not prevent the amendment of an assessment for the purposes of giving effect to this section for an income year if:
 (a) you discover the misappropriation, or you receive an amount as *recoupment of all or part of the amount misappropriated, after you lodged your *income tax return for the income year; and
 (b) the amendment is made at any time during the period of 4 years starting immediately after you discover the misappropriation or receive the amount.

Special rules

116‑65  Disposal etc. of a CGT asset the subject of an option
 (1) This section applies if:
 (a) you granted, renewed or extended an option to create (including grant or issue) or *dispose of a *CGT asset; and
 (b) another entity exercises the option; and
 (c) because of the exercise of the option, you create (including grant or issue) or dispose of the CGT asset.
 (2) The *capital