Deferred Non-commercial Business Losses worksheet

Click this link to the ATO website for information on Non-commercial business losses.

This dissection box opens from the individual return at Item 16 - Deferred non-commercial business losses and Item 16 Label G - Deferred Non-commercial business losses for sole traders.

Any partnership non-commercial losses that must be deferred are to be dissected into those relating to Financial investment activities and those related to rental properties.

Any sole trader business non-commercial losses that must be deferred are to be dissected into those relating to Financial investment activities and those related to rental properties..

This part only applies if the taxpayer carried on a business in partnership with others or as a sole trader.

If the taxpayer made a net loss from one or more business activities carried on in partnership with others or as a sole trader in the current income year, the following questions will need to be considered. These questions do not appear on the worksheet but are set out here to assist you in completing this item, either directly or by using the worksheet

1. Did you make a net loss from a business activity from a partnership or as a sole trader in the current income year? If YES, consider the following questions:
2. Does the net loss from that business activity come within the Exceptions described? If the answer is NO, continue.
3. Does the net loss from that business activity satisfy one of the 4 tests described? If the answer is NO, continue.
4. Has the Australian Taxation Office advised the taxpayer in writing that the Commissioner will exercise his discretion to allow the taxpayer to claim a net loss from that business activity? If the answer is NO, continue.

Filling in the Deferred non-business losses dialog

1. Work out the net loss to be deferred from the business activity that was carried on in partnership with others. If there is a net loss from only one business activity, go to step three.
2. If there is a net loss from more than one business activity that was carried on either in partnership with others or as a sole trader, add up all the net losses to be deferred.

3. Enter the total of your net losses to be deferred from business activities you carried on in partnership with others.

   

   The sum of the total amounts entered for primary and non-primary production is calculated.

4. Check that you have included the amount of your deferred non-commercial business losses in working out your Partnership and Trust distribution (Item 13) in the main return; otherwise you will have overstated your taxable income.

5. Keep records of the net losses deferred for all your business activities.

6. Make sure that you have completed Number of business activities (Item P3) and Business loss activity details (Item P9) in the business and professional items schedule.

The business and professional items, Business loss activity details (Item P9) MUST record the 3 highest loss-making activities (if more than three loss activities apply), whether or not the losses from these activities are being deferred.