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  • Activity 2 and activity 3

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Fill out details for the second and third largest losses (if applicable) in the same way you have done for Activity 1.

    Note

    If you made a loss from more than three business activities, determine whether you need to defer the loss for each additional business activity. You will need the total amount of your deferred non-commercial business losses to complete item 16 on your tax return (supplementary section).

    Example

    The following example shows how to fill in P8 and P9 on your schedule and how the amounts link to your tax return (supplementary section).

    In 2007 Kieren had to defer his non-commercial business loss of $6,000 from his beef cattle primary production business activity. He also had to defer his non-commercial business loss of $3,000 from his retail business activity. Because he operated the same activities in the 2009 income year he can claim the $6,000 business loss from the beef cattle primary production business activity as a deduction in relation to calculating any net profit or loss from that business activity for this income year; and the $3,000 business loss from the retail non-primary production business activity as a deduction in relation to calculating any net profit or loss from that business activity for this income year. Kieren would show the amount of $6,000 as a deduction at D item P8, and the amount of $3,000 as a deduction at E item P8 and $9,000 at the Totals on his Business and professional items schedule for individuals 2009.

    P8 Business income and expenses

     

    Primary production

     

    Non-primary production

    Totals

    Deferred non-commercial business losses from a prior year

    D

    6,000

    E

    3,000

    9,000

    This year, Kieren made a loss of $4,000 from the beef cattle primary production business. After taking into account his deferred non-commercial primary production business loss of $6,000 from the prior year, he made a net loss of $10,000. He did not satisfy any of the non-commercial business loss criteria that allow a business loss to be used to reduce other income so he must defer the $10,000 net loss this year.

    Kieren would show the $6,000 deferred non-commercial business loss from the prior year at H item P9 and the net loss of $10,000 at I item P9 on his Business and professional items schedule for individuals 2009. As the loss is to be deferred he would show loss code 8 at G item P9 in the Type of loss box. See Type of loss for a description of the loss codes.

    P9 Business loss activity details

    Show details of up to three business activities in which you made a net loss this year. List them in order of size of loss - greatest first. If you are completing this item because you have deferred non-commercial business losses, you must also complete item 16 on your tax return.

    Activity 1

    Description of activity

    D

    Beef cattle

    Tax office use only

    E

     

    F

    Partner ship

    Sole trader

    S

             

    Code

    Year

    Number

    Type of loss

    G

    8

    Reference for code 5

    C

     

    Y

     

    A

     

    Deferred non-commercial business loss from a prior year

    H

    6,000

    Net loss

    I

    10,000

    This year, Kieren made a loss of $5,000 from the computer repairs non-primary production business. After taking into account his deferred non-commercial non-primary production business loss of $3,000 from the prior year, he made a net loss of $8,000. He did not satisfy any of the non-commercial business loss criteria that allow a business loss to be used to reduce other income so he must defer the $8,000 net loss this year.

    Kieren would show the $3,000 deferred non-commercial business loss from the prior year at N item P9 and the net loss of $8,000 at O item P9 on his Business and professional items schedule for individuals 2009. As the loss is to be deferred he would show loss code 8 at M item P9 in the Type of loss box. See Type of loss for a description of the loss codes.

    Activity 2

    Description of activity

    J

    Computer repairs

    Tax office use only

    K

     

    L

    Partner ship

    Sole trader

     
             

    Code

    Year

    Number

    Type of loss

    M

    8

    Reference for code 5

    C

     

    Y

     

    A

     

    Deferred non-commercial business loss from a prior year

    N

    3,000

    Net loss

    0

    8,000

    Kieren would also need to complete G, I and J item 16 on his tax return (supplementary section), deferring his net losses of $10,000 from primary production and $8,000 from non-primary production, a total deferred net loss of $18,000. He would not be able to use this net loss to reduce his other income this year.

    16 Deferred non-commercial business losses

    Your share of deferred losses from partnership activities

    F

         

    Deferred losses from sole trader activities

    G

    18,000

       

    Item P9 in the Business and professional items schedule for individuals 2009 must be completed before you complete this item.

    Primary production deferred losses

    I

    10,000

     

    Non Primary production deferred losses

    J

    8,000

    Last modified: 27 Apr 2010QC 21791