Document ID: chunk:federal_register_of_legislation:C2007A00078:clause:2_1:p2
Version: federal_register_of_legislation:C2007A00078
Segment Type: clause
Provision Reference: sch 2 cl 1 (pt 2/3)
Character Range: 10310–12857

on.

Note: Even if this exception applies to you, you may still have to quarantine losses under Division 35 (deferral of losses from non‑commercial business activities).

Exception: fringe benefits

 (4) The rule in subsection (2) does not apply to so much of an amount you incur in *providing a *fringe benefit.

Modification if you have boat capital gains

 (5) You reduce a quarantined amount you have for an income year by so much of that amount as is applied under section 118‑80 to reduce a *capital gain you have for the year in relation to a boat. You make this reduction before you deduct an amount under subsection (6).

Deduction if you have boat business profits

 (6) You can deduct all or part of your remaining quarantined amount for an income year if your assessable income for the year from activities of a kind referred to in subsection (3) exceeds your deductions for the year relating to those activities. The amount you can deduct is the lesser of that excess and that remaining quarantined amount.

 (7) You reduce your quarantined amount for the year by the amount you deduct. You make this reduction before a reduction under subsection (8).

Modification if you have exempt income

 (8) You reduce any remaining quarantined amount you have for an income year by so much of your *net exempt income as is not applied for that income year under section 35‑15 (about non‑commercial business activities) or section 36‑10 or 36‑15 (about tax losses).

Modification if you become bankrupt

 (9) The modification in subsection (10) has effect if:
 (a) in an income year (the current year) you become bankrupt or are released from a debt by the operation of an Act relating to bankruptcy; or
 (b) you became bankrupt before the current year and:
 (i) the bankruptcy is annulled in the current year under section 74 of the Bankruptcy Act 1966 because your creditors have accepted a proposal for a composition or scheme of arrangement; and
 (ii) under the composition or scheme of arrangement, you have been, will be or may be released from some or all of the debts from which you would have been released if you had instead been discharged from the bankruptcy.

 (10) This Act applies to you as if any amount that:
 (a) is a quarantined amount for you for the current year or was a quarantined amount for you for an earlier year; and
 (b) has not been applied under section 118‑80 and that you have not yet deducted;
were not an amount relating to using or holding boats that you can deduct for the current year or a later year.