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.
Division 245 of the ITAA 1997 – Forgiveness of a commercial debt
Taxation Determination TD 2019/D9 Income tax: commercial debt forgiveness