• 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 losses to complete item 15 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 2005 Kieren had to defer his non-commercial business loss of $6,000 from his beef cattle primary production business activity. Because he operated the same activity in the 2006 income year he can claim the $6,000 as a deduction in relation to calculating any net profit or loss from the business activity for this income year. Kieren would show the amount as a deduction at D item P8 on his Business and professional items schedule for individuals 2005-06.

    P8 Business income and expenses

     

    Primary production

    Non-primary production

    Totals

    Deferred non-commercial business losses from a prior year.

    D

    6,000

    E

     

    6,000

    This year, Kieren made a loss of $4,000. After taking into account his deferred non-commercial 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 2005-06. As the loss is to be deferred he would show loss code 8 at G item P9 in the Typeofloss box. See Type of loss for a description of the loss codes.

    P9

    Business loss activity details

     

    Activity 1

    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 the item because you have deferred non-commercial business losses, you must also complete item 15 on your tax return

    Description of activity

    D

    Beef cattle

    ATO use only

    E

     

    F

    Partnership

     

    Sole trader

    S

     
     

    Code

    Year

    Number

    Type of loss

    G

    8

    Reference for code 5

    C

     

    Y

     

    /

    A

     

    Deferred non-commercial business losses from a prior year

    H

    6,000

     

    Net loss

    I

    10,000

    Kieren would also need to complete G and H item 15 on his tax return (supplementary section), deferring his $10,000 net loss. He would not be able to use this net loss to reduce his other income this year.

    15 Deferred non-commercial business losses

    Your share of deferred losses from partnership activities

    F

         

    Deferred losses from sole trader activities

    G

    10,000

     

    Item P9 in the Business and professional items for individuals 2006 must be completed before you complete this item.

    Total deferred losses

    H

    10,000

    Last modified: 01 Sep 2006QC 18499