Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) CGT event K2 happens if:
(a) you made a * net capital loss for an income year that, because of subsection 102 - 5(2), cannot be applied in working out whether you made a * net capital gain for the income year or a later one; and
(b) you make a payment in an income year (the payment year ) in respect of a debt that was taken into account in working out the amount of that net capital loss; and
(c) ignoring subsection 102 - 5(2), some part of the net capital loss (the denied part ) would have been applied (if you had made sufficient * capital gains) in working out whether you had made a * net capital gain for the payment year.
The payment can include giving property: see section 103 - 5.
(2) The time of the event is when you make the payment.
(3) You make a capital loss equal to the smallest of:
(a) the amount you paid; or
(b) that part of it that was taken into account in working out the denied part; or
(c) the denied part less the sum of * capital losses you made as a result of previous payments you made in respect of the debt that was taken into account in working out the denied part.
(4) In calculating that capital loss , disregard any amount you have received as * recoupment of the payment and that is not included in your assessable income.