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Edited version of your private ruling
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Ruling
Subject: Assessable income
Question:
Can my deferred loss amounts carried forward from previous years be counted as an income amount in the current or future years?
Answer:
No.
This ruling applies for the following period
Year ended 30 June 2010
Year ended 30 June 2011
Year ended 30 June 2012
The scheme commenced on
01 July 2009
Relevant facts
You claimed losses from a business activity which were deferred in the 2009-10 and 2010-11 financial years.
Relevant legislative provisions
Income Tax Assessment Act 1997 section 6-1
Income Tax Assessment Act 1997 section 6-5
Income Tax Assessment Act 1997 section 6-10
Reasons for decision
Section 6-1 of the Income Tax Assessment Act 1997 (ITAA 1997) defines assessable income as ordinary income and statutory income.
Subsection 6-5(1) of the ITAA 1997 provides that an amount is included in assessable income if it is income according to ordinary concepts (ordinary income). The terms 'income' and 'ordinary income' are not otherwise defined by the Income Tax Assessment Act 1936 or the ITAA 1997.
The Macquarie Dictionary defines income as:
1. the returns that come in periodically, especially annually, from one's work, property business, etc; revenue; receipts, or
2. something that comes in.
Statutory income is defined in section 6-10 of the ITAA 1997. It is defined as amounts which are usually not ordinary income but which are included in assessable income by a specific provision of the ITAA 1997 or ITAA 1936. Section 10-5 of the ITAA 1997 lists the specific provisions that include an amount in assessable income.
A loss is not an amount received, nor is it statutory income.
Therefore, a loss can never constitute an 'income' amount.
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