You must complete this section if you have partnership or business losses for the 2013-14 income year or if you intend to claim a deferred non-commercial business loss from an earlier income year.
The non-commercial loss rules include an income requirement to further restrict the circumstances where a business loss can offset other income. You will meet the income requirement where your income for non-commercial losses purposes is less than $250,000.
For more information, refer to, Non-commercial losses - income requirement.
If you have both partnership and business losses, complete H1 for your partnership and H2 and H3 for your business/es. If you have more than one partnership or more than two businesses, attach a separate sheet with the required details.
A Description of business activity
Describe the business activity from which you generated the loss.
B Loss code
Indicate the most applicable loss code from the following table:
Loss code
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Category
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1
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Your loss relates to a business activity with assessable income of at least $20,000.
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2
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The particular business activity has resulted in a profit for tax purposes in three out of the last five years.
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3
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The value of real property assets used in carrying on the business activity is at least $500,000.
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4
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The value of other assets (except cars, motor cycles or similar vehicles) used in carrying on the business activity is at least $100,000.
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5
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You obtained advice that the Commissioner exercised his discretion allowing your losses to be deducted.
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6
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You operate a professional arts business and your assessable income for this year (except net capital gains) from other sources not related to that activity is less than $40,000. A professional arts business is a business you carry on as an author of a literary, dramatic, musical or artistic work; a performing artist; or a production associate.
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7
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You operate a primary production business and your assessable income for this year (except net capital gains) from other sources not related to that activity is less than $40,000.
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0
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None of the above codes apply.
 You cannot claim a loss for the 2013-14 income year. For more information, read on.
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If you have a loss for the 2013-14 income year and you have entered your loss code as '0' you cannot claim that loss or any deferred non-commercial business losses. You do not need to complete C and D in section H and you must not claim any of these losses at E6 or E7 or F2 on your PAYG withholding variation application 2014. If you have a profit for 2013-14, see D for how to recoup deferred non-commercial business losses.
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C Loss for 2013-14 income year
If you have a loss code at B (other than loss code 0), show the amount of loss you intend to claim for 2013-14 at C. If you have deferred non-commercial business losses from an earlier year, see D below. If not, transfer the amount from C to E6 for a partnership, or E7 for a business on your PAYG withholding variation application 2014.
D Deferred non-commercial business losses
If you were unable to deduct a business loss against other income in the year it arose, this is called a deferred non-commercial business loss. Show the value of deferred non-commercial business losses at D. You may be eligible to recoup some or all of your deferred non-commercial business losses for 2013-14 in the following circumstances:
(i) If you have made a profit from a business activity that is the same as, or similar to, that which gave rise to the deferred loss. If so, and (ii) below does not apply, you can recoup the deferred loss only to the extent of this profit. You must defer any remaining part of this deferred loss to the next year the activity, or an activity of a similar kind, is carried on. The amount to be shown at E6 for a partnership, or E7 for a business, on your PAYG withholding variation application 2014 is only any excess profit remaining after the deferred loss has been recouped.
(ii) If you have shown a loss code at B (other than loss code 0), add the amount at D to the amount at C and then transfer this total to E6 for partnership or E7 for business on your PAYG withholding variation application 2014.
Sections within Instructions
Last Modified: Wednesday, 1 May 2013