INCOME TAX ASSESSMENT ACT 1997 - SECT 35.20 Modification if you become bankrupt

INCOME TAX ASSESSMENT ACT 1997 - SECT 35.20

  (1)   The rule in subsection   35 - 10(2) or (2A) is modified as set out in subsection   (3) for an income year if in that year (the current year ) you become bankrupt or are released from a debt by the operation of an Act relating to bankruptcy.

  (2)   The rule is also modified as set out in subsection   (3) if:

  (a)   you became bankrupt before the current year; and

  (b)   the bankruptcy is annulled in the current year under section   74 of the Bankruptcy Act 1966 because your creditors have accepted a proposal for a composition or scheme of arrangement; and

  (c)   under the composition or scheme of arrangement, you have been, will be or may be released from some or all of the debts from which you would have been released if you had instead been discharged from the bankruptcy.

  (3)   This Act applies to you as if any amount that:

  (a)   paragraph   35 - 10(2)(b) had applied to for an income year before the current year for you; and

  (b)   you have not yet deducted;

were not an amount attributable to the * business activity that you can deduct for the current year or a later income year.