Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 36 - Tax losses of earlier income years  

Subdivision 36-A - Deductions for tax losses of earlier income years  

SECTION 36-10   How to calculate a tax loss for an income year  

36-10(1)  
Add up the amounts you can deduct for an income year (except ^* tax losses for earlier income years).

36-10(2)  
Subtract your total assessable income.

36-10(3)  
If you ^* derived ^* exempt income, also subtract your ^* net exempt income (worked out under section 36-20 ).

36-10(4)  
Any amount remaining is your tax loss for the income year, which is called a loss year .

Note 1:

Some deductions are limited so that they cannot contribute to a tax loss. See section 26-55 (Limit on certain deductions).

Note 2:

The meanings of tax loss and loss year are modified by section 36-55 for a corporate tax entity that has an amount of excess franking offsets.

36-10(5)  

For subsection (3), if you have *exempt income under section 51-100 (about shipping), disregard 90% of so much of your *net exempt income as directly relates to that exempt income.