Document ID: chunk:federal_register_of_legislation:C2004C00958:clause:1_3:p16
Version: federal_register_of_legislation:C2004C00958
Segment Type: clause
Provision Reference: sch 1 cl 3 (pt 16/17)
Character Range: 271691–274241

have deducted some or all of that interest.

Example: You acquire a house as a beneficiary in a deceased estate, rent it out for 12 months and sell it within 2 years of the deceased's death. You can ignore the rental because the exemption does not require the house to be your main residence during the 2 years after the death.

 (2) The *capital gain or *capital loss that you would have made apart from this section from the *CGT event is increased by an amount that is reasonable having regard to the extent to which you would have been able to deduct that interest.

 (3) However, you ignore any use of the *dwelling for the *purpose of producing assessable income during any period that you continue to treat it as your main residence under section 118‑145 (about absences) to the extent that any part of it was not used for that purpose just before it last ceased to be your main residence.

Example: To continue the example from section 118‑185, assume that, when you moved in, you used 1/4 of the house as a doctor's surgery.

 Under section 118‑185, your capital gain was $1,000.

 Under this section, it would be reasonable to add an amount of:

 You have a total capital gain of $3,250 on the sale of the house.

 (4) If a *dwelling or your *ownership interest in a dwelling *passed to you as a beneficiary in a deceased estate, or you owned it as the trustee of a deceased estate, you ignore any use of the *dwelling for the *purpose of producing assessable income before the deceased's death if:

 (a) the dwelling was the deceased's main residence just before the death; and

 (b) it was not being used for that purpose just before the death, or any use for that purpose just before the death was ignored because of subsection (3).

118‑192  Special rule for first use to produce income

 (1) There is a special rule if:

 (a) you would get only a partial exemption under this Subdivision for a *CGT event happening in relation to a *dwelling or your *ownership interest in it because the dwelling was used for the *purpose of producing assessable income during your *ownership period; and

 (b) you would have got a full exemption under this Subdivision if the CGT event had happened just before the first time (the income time) it was used for that purpose during your ownership period.

 (2) You are taken to have *acquired the *dwelling or your *ownership interest at the income time for its market value at that time.

 (3) If your *ownership interest in the *dwelling *passed to you as a beneficiary in a deceased