Income Tax Act 2007 section 614BO

Recovery of bad debts following reduction under section 614BN

Section 614BO deals with reinstating a lessor's cumulative normal rental excess where a bad debt that previously reduced that excess is later recovered or partly recovered.

• Where a lessor's cumulative normal rental excess was previously reduced because of a bad debt deduction under section 614BN, and the debt is later recovered or credited, the excess must be increased again
• The increase applies only if there is still a cumulative normal rental excess in the later period when the recovery or credit arises
• The increase equals the amount recovered or credited, but cannot exceed the total of the reductions that were originally made under section 614BN
• The term "bad debt deduction" takes its meaning from section 614BL(6)