Document ID: chunk:federal_register_of_legislation:C2010C00578:clause:8_9:p2
Version: federal_register_of_legislation:C2010C00578
Segment Type: clause
Provision Reference: sch 8 cl 9 (pt 2/3)
Character Range: 87067–89545

assessable income of $200 (franked distribution of $70, franking credit of $30 and $100 of income from other sources); and
  *   no allowable deductions; and
  *   no net exempt income.

 The tax offset of $30 from the franking credit is not subject to the refundable tax offset rules in Division 67.

 Company A would not have an amount of excess franking offsets for that year if the tax loss were disregarded (see section 36‑55). This is because the tax offset of $30 is less than $60, the amount of income tax that Company A would have to pay if it did not have the tax offset and the tax loss. Paragraph (a) therefore does not apply.

 If Company A chooses to deduct the full amount of the tax loss, it would have an amount of excess franking offsets of $15:

 Company A therefore cannot make this choice because of paragraph (b).

 However, if Company A chooses to deduct $100 of the tax loss, it would not have an amount of excess franking offsets:

 Company A therefore can choose to deduct $100 of the tax loss.

 (6) The entity must state its choice under subsection (2) or (3) in its *income tax return for the later income year.

General

 (7) If the entity has 2 or more *tax losses, the entity is to deduct them in the order in which the entity incurred them.

 (8) A *tax loss can be deducted under this section only to the extent that it has not already been deducted.

 (9) If, under this section, a *corporate tax entity does not or cannot deduct all or part of a *tax loss in an income year, the entity can carry forward the undeducted amount to the next income year. This Subdivision then applies in working out how it can deduct the tax loss in that income year.

Note: The entity's tax losses may be reduced if any of its commercial debts have been forgiven in the income year: see Subdivision 245‑E of Schedule 2C to the Income Tax Assessment Act 1936.

Recalculation of amounts resulting in a choice or a change of a choice

 (10) Subsection (11) or (12) applies if at least one of the following amounts is recalculated after an entity has lodged its *income tax return for an income year:
 (a) the amount of a *tax loss that the entity can deduct in that year;
 (b) the amount of the difference between the entity's total assessable income for that year and the entity's total deductions (other than *tax losses) for that year;
 (c) the amount of the entity's *net exempt income for that year;
whether or not the amount is recalculated in an amendment