ATO & Commecial Debt forgiveness

Situations that attract the ATO's attention include entities that have:

🚩 had a debt forgiven (whether formally or informally)

a commercial debt forgiven, but the gain it represents for the debtor has not been recorded correctly in the tax return;

🚩 had a deemed forgiveness that takes place when a debt is assigned to a party related to the debtor;

🚩 entered into a debt for equity swap and failed to adjust their loss claims.

See also:

Division 245 of the ITAA 1997 – Forgiveness of a commercial debt

Debt forgiveness and CGT: https://www.ato.gov.au/Individuals/Tax-return/2021/In-detail/Publications/Guide-to-capital-gains-tax-2021/?page=10#Debt_forgiveness

Taxation Determination TD 2019/D9 Income tax: commercial debt forgiveness