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This edited version has been archived due to the length of time since original publication. It should not be regarded as indicative of the ATO's current views. The law may have changed since original publication, and views in the edited version may also be affected by subsequent precedents and new approaches to the application of the law.

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Edited version of your written advice

Authorisation Number: 1051429310853

Date of advice: 13 September 2018

Ruling

Subject: Commissioner’s discretion for non-commercial losses

Question

Will the Commissioner exercise the discretion in paragraph 35-55(1)(a) of the Income Tax Assessment Act 1997 (ITAA 1997) to allow you to include any losses from your business activity in your calculation of taxable income for the 20XX-XX financial year?

Answer

Yes

Having regard to your full circumstances, it is accepted that your business activity was affected by special circumstances outside your control, and that these special circumstances prevented you meeting one of the four tests. Consequently the Commissioner will exercise his discretion in the 20XX-XX financial year.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You satisfy the <$250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.

You carry on a business which commenced in late 20XX.

You commenced business operations in the 20XX-XX financial year.

You have met the assessable income test in the 20XX-XX, 20XX-XX and 20XX-XX financial years.

You submit that you were affected by special circumstances in the 20XX-XX financial year, as you had a number of sellable items from your business activity stolen from your business location.

Prior to the theft you had sold a number of these items in the 20XX-XX financial year, however the total of sales fell short $20,000.

You have reported the stolen items to the local police authority.

You have submitted the following evidence to substantiate your claim:

You submit that the special circumstances impacted on your business in the following way:

You intend to make $20,000 in assessable income in the 2018-19 financial year.

Relevant legislative provisions

Income Tax Assessment Act 1997 subsection 35-10(1)

Income Tax Assessment Act 1997 subsection 35-10(2)

Income Tax Assessment Act 1997 subsection 35-10(2E)

Income Tax Assessment Act 1997 paragraph 35-55(1)(a)


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