Document ID: chunk:federal_register_of_legislation:C2025C00029:section:4:p4
Version: federal_register_of_legislation:C2025C00029
Segment Type: section
Provision Reference: s 4 (pt 4/6)
Character Range: 6138979–6141835

joining time. However, that tax cost does not alter calculations of the net income or exempt income of the partnership, or of a partnership loss, for the purposes of section 92 of the Income Tax Assessment Act 1936.

713‑225  Tax cost setting amount for partnership cost setting interest
 (1) This section modifies the way in which the *tax cost setting amounts are worked out under Division 705 for the *partnership cost setting interests mentioned in paragraph 713‑220(2)(a).

Partnership cost setting interest takes character of partnership asset—general
 (2) Work out the *tax cost setting amounts for those *partnership cost setting interests as if any partnership cost setting interest that relates to an asset (the underlying partnership asset) of the partnership were an asset of the same kind as the underlying partnership asset.
Note: The kinds of assets mentioned in subsection (2) include the following:
(a) retained cost base assets;
(b) reset cost base assets that are held on revenue account (however, if such assets are trading stock or depreciating assets, the special rule in subsection (4) will apply) or on capital account;
(c) excluded assets (see subsection (3));
(d) current assets (within the meaning of subsection 705‑125(2)).
Example: The partnership has an asset that is Australian currency (which is a retained cost base asset). A partnership cost setting interest of the joining entity in that asset is treated as a retained cost base asset for the purpose of working out the tax cost setting amounts for the joining entity's partnership cost setting interests in the partnership.

Partnership cost setting interest takes character of partnership asset—excluded assets
 (3) If:
 (a) tax cost setting amounts were to be worked out for the assets of the partnership under Division 705; and
 (b) in working out those amounts, the underlying partnership asset mentioned in subsection (2) would be an excluded asset for the purposes of section 705‑35;
then subsection (2) operates so that the *tax cost setting amounts for those *partnership cost setting interests are worked out as if any partnership cost setting interest that relates to the underlying partnership asset were an excluded asset for the purposes of section 705‑35.

Special character of partnership cost setting interest in partnership asset that is trading stock, a depreciating asset or a registered emissions unit
 (4) Despite subsection (2), if an asset of the partnership is *trading stock, a *depreciating asset or a *registered emissions unit, work out the *tax cost setting amounts for those *partnership cost setting interests as if:
 (a) a partnership cost setting interest relating to that asset were a *retained cost base asset; and
 (b) the tax cost setting amount for that partnership cost setting interest were equal to its *terminating value (worked