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Date Posted: Tuesday, June 10, 01:19:42pm
Author: Melissa Doherty
Subject: Re: Losing money
In reply to: Jacob 's message, "Losing money" on Monday, June 09, 07:36:25pm

Jacob,

In regards to your enquiry, i am taking "Company goes under" to mean if the company goes into liquidation. If the company goes into liquidation and the liquidator declares in writing that he or she has reasonable grounds to believe that there is no likelihood that shareholders in the company, or shareholders of a relevant class of shares, will receive any further distribution.

Shareholders can choose to make a capital loss equal to the reduced cost base of a share acquired on or after 20 September 1985. The capital loss arises in the income year in which the liquidator made the declaration.

So put in simple terms, yu can declare the loss as a deduction, but not until the Liquidator declares it. You can find out whether it has been declared by contacting the Australian Taxation Office, or by checking there website.

Hopes this helps.

Kind Regards

Melissa Doherty
Accountant
Cox Business Accountants
Ph: 02 6288 0901
Fax: 02 6288 1218
Email:melissa@coxbiz.com.au

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