Section EZ 23F — Income Tax Act 2007: Insurance for Canterbury earthquake damage causing disposal: optional timing rule for income, deductions

EZ 23F Insurance for Canterbury earthquake damage causing disposal: optional timing rule for income, deductions When this section applies (1) This section applies for a person and an item of depreciable property when— (a) the item is damaged by a Canterbury earthquake as that term is defined in section 4 of the Canterbury Earthquake Recovery Act 2011; and (b) the damage— (i) results in the item being affected by a disposal and reacquisition under section EZ 23C ; or (ii) meets the requirements of section EE 47(4) (Events for purposes of section EE 44 ); and (c) the person is entitled to an amount of insurance or compensation for the damage to the item; and (d) the person chooses to apply this section for all items of depreciable property meeting the requirements of paragraphs (a) to (c). Attribution of income from insurance and disposal (2) If the amount of insurance or compensation for the damage (the insurance receipt ) is derived or able to be reasonably estimated before the end of the 2015–16 income year, the person's income from the insurance receipt and the consideration derived from the disposal of the item is attributed to the earlier of— (a) the 2015–16 income year: (b) the first income year in which— (i) the amount of the cost of disposing of the item (the disposal cost ) is or has been incurred or able to be reasonably estimated; and (ii) the insurance receipt is or has been derived or able to be reasonably estimated; and (iii) the consideration from the disposal of the item is or has been derived or able to be reasonably estimated. Attribution of deductions (3) If the disposal cost is incurred or able to be reasonably estimated before the end of the 2015–16 income year, the person's deductions for the disposal cost and for depreciation loss under section EE 48 (Effect of disposal or event) are attributed to the earlier of— (a) the 2015–16 income year: (b) the first income year in which— (i) the disposal cost is or has been incurred or able to be reasonably estimated; and (ii) the insurance receipt is or has been derived or able to be reasonably estimated; and (iii) the consideration from the disposal of the item is or has been derived or able to be reasonably estimated. Relationship with other sections (4) This section overrides sections EE 1 , EE 22 , and EE 48 (which state when depreciation loss and depreciation recovery income arise) in relation to the timing of the person's— (a) income from the insurance receipt and consideration from the disposal of the item: (b) deductions for the disposal cost and depreciation loss. Defined in this Act: amount , building , deduction , grandparented structure , income , income year Section EZ 23F: inserted (with effect on 4 September 2010), on 2 November 2012 (applying for the 2010–11 to the 2015–16 income years), by section 60(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).