Section 426 — Income Tax Assessment Act 1936: Creation of loss

For the purposes of this Subdivision, if: (a) the amount of the eligible CFC’s notional allowable deductions (other than under section 431) for a statutory accounting period (being the eligible period or an earlier period) are applied as follows: (i) they are applied first against any notional assessable income of the eligible CFC class for the period; (ii) any excess is then applied against any (sometimes-exempt income) gain for the period; and (b) there is any amount remaining; then the amount remaining is a loss of the eligible CFC for the period.