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IR6 Question 20 Net losses brought forward

There are two types of losses the estate or trust can bring forward.

Specified activity net losses

These are net losses from before the 1991 income year, which were limited to $10,000. Any loss balance in relation to a specified activity that remained at the end of the 2018 income year must be offset against net income for the 2019 income year, before taking into account other losses. The amount of this offset cannot exceed the net income.

If the loss balance from specified activities incurred before the 1991 income year exceeds the net income for the 2019 income year, that excess amount is added to the tax loss for the year. Any remaining tax loss is then carried forward to further income years.

Other net losses

All losses incurred from the 1991 income year onwards and other net losses that weren’t limited before 1991 (including any net loss resulting from excess imputation credits) are “other net losses”.

Enter the total of all specified activity net losses and other net losses the estate or trust can bring forward to 2019 in Box 20A. Enter the amount the estate or trust has offset against 2019 income in Box 20B.

You’ll find the amount of net loss the estate or trust has to bring forward on the loss notice Inland Revenue sent you with the 2018 income tax assessment. If you don’t have a loss notice, call Inland Revenue to obtain the figure.

Losses cannot be transferred from the deceased’s return to the estate’s return. Any such losses lapse.

Trust losses cannot be passed to beneficiaries. They remain in the trust to be offset against future trustee income.

If the estate or trust can’t offset any losses in 2019, enter 0.00 in Box 20B.

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