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INCOME TAX ASSESSMENT ACT 1997 - SECT 124.790 Partial roll - over

INCOME TAX ASSESSMENT ACT 1997 - SECT 124.790

Partial roll - over

  (1)   The original interest holder can obtain only a partial roll - over if its * capital proceeds for its original interest include something (the ineligible proceeds ) other than its replacement interest. There is no roll - over for that part (the ineligible part ) of its original interest for which it received ineligible proceeds.

  (2)   The * cost base of the ineligible part   is that part of the cost base of your original interest as is reasonably attributable to it.

Example:   Ken owns 100 shares in Aim Ltd. Those shares have a cost base of $2.

  Ken accepts an offer from LBZ Ltd to acquire those shares. The offer is 1 share in LBZ (market value $4) plus $1 for each Aim share.

  Ken chooses the roll - over to the extent that he can.

  The cost base of the ineligible part   is [$100 ï‚´ $200]  $500  $40.

  Ken makes a capital gain of $100 ï€- $40  $60.

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