DB 43 Making good loss from misappropriation by partners
When this section applies


This section applies when a person carrying on a business in partnership pays an amount to make good a loss that arises from a partner, other than the person or the person’s spouse, civil union partner, or de facto partner, misappropriating property that—


belongs to another person who is neither a partner in the partnership nor the spouse, civil union partner, or de facto partner of a partner; and


is received in the course of the business either by the partnership or 1 or more of its partners.



The person is allowed a deduction for the amount if the person is under a legal liability to make good the loss.

Timing of deduction


The deduction is allocated to the income year in which the amount is paid.

Link with subpart DA


This section supplements the general permission and overrides the capital limitation. The other general limitations still apply.

Defined in this Act: amount, business, capital limitation, deduction, general limitation, general permission, income year, pay, supplement

Compare: 2004 No 35 s DB 34