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  • Offsetting current year losses

    Only sole traders or individual partners in a partnership who meet one of the non-commercial losses requirements can offset business losses against other income (such as salary or investment income) in the same income year.

    If you do not meet any of these requirements, you can still defer the loss or carry it forward to future years. If your business makes a profit in a following year, you can offset the deferred loss against that profit.

    The non-commercial business loss requirements are:

    • Your business is a primary production business or a professional arts business and you make less than $40,000 (excluding any net capital gains) in an income year from other sources.
    • Your income for non-commercial business loss purposes is less than $250,000, and either
      • your assessable business income is at least $20,000 in the income year
      • your business has produced a profit in three out of the past five years (including the current year)
      • your business uses, or has an interest in, real property worth at least $500,000, and that property is used on a continuing basis in a business activity (this excludes your private residence and adjacent land)
      • your business uses certain other assets (excluding motor vehicles) worth at least $100,000 on a continuing basis.
    • You have been granted a Commissioner's discretion allowing you to offset the loss.

    See also:

    Last modified: 03 Apr 2017QC 33729