Document ID: chunk:federal_register_of_legislation:C2010C00615:clause:1_18:p18
Version: federal_register_of_legislation:C2010C00615
Segment Type: clause
Provision Reference: sch 1 cl 18 (pt 18/23)
Character Range: 63597–66145

that the entity can deduct in respect of the disposal of any of the equity or debt is to be reduced by the adjustment amount calculated under section 165‑115ZB.

Reduction of cost—equity or debt is trading stock

 (5) If:
 (a) an equity or debt is an item of *trading stock of the affected entity immediately before the relevant time; and
 (b) the *cost for the purposes of Division 70 of the equity or debt exceeds its market value immediately before the relevant time;
then, subject to any later application or applications of this Subdivision, the cost of the equity or debt for the purposes of Division 70, and any deduction for an outlay to *acquire it, are reduced by the lesser of the following amounts or, if they are equal, by one of them:
 (c) the adjustment amount calculated under section 165‑115ZB;
 (d) the amount of the excess referred to in paragraph (b).

Subsection (4) to apply only in respect of certain income years

 (6) For the purpose of working out:
 (a) deductions under section 8‑1; or
 (b) whether an amount is included in assessable income under subsection 70‑35(2); or
 (c) whether an amount can be deducted under subsection 70‑35(3);
subsection (5) applies only in respect of income years ending after the later of the following:
 (d) the commencement time;
 (e) the time 12 months before the relevant time.

Further election to value trading stock

 (7) If an election has been made under section 70‑45 to value an item of *trading stock on hand at the end of an income year otherwise than at its *cost and subsection (5) applies in respect of it, a further election may be made under that section to value the item of trading stock at cost.

Previous applications of this section in relation to trading stock to be taken into account

 (8) In applying this section to the affected entity in respect of an equity or debt that is *trading stock of the entity, any previous applications of this section to the entity in respect of the equity or debt are to be taken into account.

Cost of equity or debt that becomes trading stock after relevant time

 (9) If:
 (a) an equity or debt becomes an item of *trading stock of the affected entity after the relevant time; and
 (b) had the equity or debt been an item of trading stock of the affected entity at an earlier time that was, or at 2 or more earlier times each of which was, the relevant time for the purposes of a previous application or previous applications of this section, its *cost for the purposes of Division 70 would have exceeded its market value at