This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
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It is important to determine whether you are carrying on a business or pursuing a hobby, sport or recreational activity that does not produce income.
In general, you are considered to carry on a business if the activity:
- has commenced
- has a significant commercial purpose or character
- has a purpose of profit as well as a prospect of profit
- is carried out in a manner that is characteristic of the industry
- is repeated, regular or continuous, and
- cannot be more accurately described as a hobby, recreation or sporting activity.
For additional information, see 'Are you carrying on a business?' in the publication Tax basics for small business (NAT 1908-6.2005). Primary producers should also see Taxation Ruling TR 97/11 - Am I carrying on a business of primary production?
When you have completed your Business and professional items schedule for individuals 2005-06, you will need to transfer your:
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- net PSI (personal services income (PSI) amount (if any) from A item P1 on your schedule to A item 13 on page 9 of your tax return (supplementary section)
- net income or loss from business amounts from Y and Z item P8 on your schedule to B and C (respectively) item 14 on page 10 of your tax return (supplementary section).