36‑35 No deduction for tax loss incurred36‑35 No deduction for tax loss incurred before bankruptcy

#### 36‑35 No deduction for tax loss incurred before bankruptcy (1) If: (a) you became bankrupt; or (b) you were released from a debt by the operation of an Act relating to bankruptcy; before the income year, you cannot deduct a \*tax loss that you incurred before the day on which you either became bankrupt or were released. (2) If: (a) you became bankrupt before the income year; and (b) the bankruptcy is later annulled under section 74 of the Bankruptcy Act 1966 because your creditors have accepted your proposal for a composition or scheme of arrangement; and (c) under the composition or scheme of arrangement, you have been, will be or may be released from some or all of the debts from which you would have been released if you had instead been discharged from the bankruptcy; you cannot deduct a \*tax loss that you incurred before the day on which you became bankrupt.