Document ID: chunk:federal_register_of_legislation:C2025C00029:section:3:p9
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 3 (pt 9/34)
Character Range: 1682371–1685217

year:
 (a) the amount worked out under step 4 of the method statement in section 86‑20 is greater than zero; and
Note: This happens if the entity has entity maintenance deductions that form some or all of the reduction under section 86‑20.
 (b) the *ordinary income or *statutory income of the *personal services entity includes another individual's *personal services income (as well as your personal services income); and
 (c) the other individual's personal services income is included in the other individual's assessable income under section 86‑15;
the amount worked out under step 4 is taken to be:
where:
original step 4 amount is the amount that would be the amount worked out under step 4 if this section did not apply.
total personal services income is the sum of all the amounts of personal services income (whether your personal services income or someone else's) that are included in the personal services entity's ordinary income or statutory income for the income year.
your personal services income is the sum of all the amounts of your personal services income that are included in the personal services entity's ordinary income or statutory income for the income year.
Example: Continuing example 2 in section 86‑20: Assume that Robyn, another computer consultant, joined NewIT, and NewIT's ordinary income from providing the services also includes Robyn's personal services income of $168,000.
 Because NewIT now receives the personal services income of someone else, Ron's step 4 amount is reduced as follows:
 Under step 5 of the method statement in section 86‑20, the amount of the reduction under that section is therefore $52,500, and the amount included in Ron's assessable income is $67,500.

86‑27  Deduction for net personal services income loss
  If your personal services deduction amount exceeds your unreduced personal services income, then you can deduct the excess amount. For this purpose:
 (a) your personal services deduction amount is the amount of deductions relating to your *personal services income worked out under step 1 of the method statement in section 86‑20, increased by the amount (if greater than zero) worked out under step 4 of the method statement; and
 (b) your unreduced personal services income is the personal services income that would have been included in your assessable income for the income year if there had not been any reduction under section 86‑20.

86‑30  Assessable income etc. of the personal services entity
  *Ordinary income or *statutory income of the *personal services entity is neither assessable income nor *exempt income of the entity, to the extent that it is *personal services income included in your assessable income under section 86‑15.
Note: Subsection 118‑20(4) prevents this income being treated as a capital gain.

86‑35  Later payments of, or entitlements