MasterNuggets with Meng: When Debts Are Forgiven

Explore the tax consequences hiding behind forgiven debts and the key issues practitioners need to navigate.

In this session, we cover: 

• Divison 7A

  • Interaction between s 109F and s 109D

  • Application of s 109G

• Commercial debt forgiveness rules – Div 245

  • What is a commercia debt?

  • Exclusions (e.g. love and affection)

  • What is the value of the debt?

  • Calculating the NFA

  • Applying the NFA to reduce tax attributes