Non-commercial losses: income requirement

If you have a net loss from a business activity you carry on as an individual, either as a sole trader or in partnership, the non-commercial loss rules will apply. Under these rules, you can work out whether you can use your business loss to offset income from other sources.

For information on non-commercial losses generally, refer to Guide to non-commercial losses.

Income requirement

You must first meet the income requirement before you can apply the non-commercial loss tests. If you then pass one of the four tests, you can deduct your loss.

You meet the income requirement if your income for non-commercial loss purposes is less than $250,000.

Income for non-commercial loss purposes is the sum of all of the following:

1. your taxable income (ignoring any business losses)
2. your total reportable fringe benefits
3. your reportable super contributions
4. your total net investment losses.

More information

Guide to non-commercial losses