Document ID: chunk:federal_register_of_legislation:C2025C00029:section:7:p17
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 7 (pt 17/40)
Character Range: 1865667–1868290

you make the choice, the *cost base and *reduced cost base of the *shares or financial instruments are reduced to nil just after the declaration was made.
Note: This is for the purpose of working out if you make a capital gain or loss from any later CGT event in relation to the shares or financial instruments.

Exceptions
 (6) You cannot choose to make a *capital loss if:
 (a) you *acquired the shares or financial instruments before 20 September 1985; or
 (b) the shares or financial instruments were *revenue assets at the time when the declaration was made.
 (7) You cannot choose to make a *capital loss for a *share, or a right to acquire a beneficial interest in a share, if:
 (a) you acquired the beneficial interest (the ESS interest) in the share or right under an *employee share scheme; and
 (b) subsequent to an amount being included in your assessable income under Division 83A (about employee share schemes) in relation to the ESS interest, section 83A‑310 (about forfeiture) applies in relation to ESS interest.

Subdivision 104‑H—Special capital receipts

Table of sections
104‑150 Forfeiture of deposit: CGT event H1
104‑155 Receipt for event relating to a CGT asset: CGT event H2

104‑150  Forfeiture of deposit: CGT event H1
 (1) CGT event H1 happens if a deposit paid to you is forfeited because a prospective sale or other transaction does not proceed.
The payment can include giving property: see section 103‑5.
Example: You decide to sell land. Before entering into a contract of sale, the prospective purchaser pays you a 2 month holding deposit of $1,000.
 The negotiations fail and the deposit is forfeited.
 (1A) The amount of the deposit is reduced by any part of the deposit that is:
 (a) repaid by you; or
 (b) compensation you paid that can reasonably be regarded as a repayment of all or part of the deposit.
The payment can include giving property: see section 103‑5.
 (1B) However, the deposit is not reduced by any part of the payment that you can deduct.
 (2) The time of the event is when the deposit is forfeited.
 (3) You make a capital gain if the deposit is more than the expenditure you incur in connection with the prospective sale or other transaction. You make a capital loss if the deposit is less.
 (4) The expenditure can include giving property: see section 103‑5. However, it does not include an amount you have received as *recoupment of it and that is not included in your assessable income.
Example: To continue the example: if you gave a lawyer wine worth $400 in connection with the prospective sale, you make a capital gain of:

104‑155  Receipt for event relating