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Edited version of private advice
Authorisation Number: 1051684659106
Date of advice: 21 May 2020
Ruling
Subject: Non-commercial losses
Question
Will the Commissioner exercise his discretion to allow you to include any losses from your primary production business in the calculation of your taxable income for the 2017-18 to 2020-21 financial years?
Answer
Yes. Having considered your circumstances and the relevant factors the Commissioner has granted his discretion. It is accepted there is a 'lead time' in the nature of your business activity and you will make a tax profit within your industry's commercially viable period. Further information on non-commercial losses can be found by searching 'QC 33774' on ato.gov.au
This ruling applies for the following period
Year ended 30 June 2018
Year ended 30 June 2019
Year ended 30 June 2020
Year ended 30 June 2021
The scheme commenced on
1 July 2017
Relevant facts
You commenced a primary production business activity in the 2017-18 financial year.
The business activity involves livestock breeding activities using elite stock to breed a superior commercial herd for sale.
Your breeding activities also include the use of frozen embryos imported for overseas.
The business has taken time to establish and you will commence selling your livestock at public auction from the 2020-21 financial year.
Your projected profit and loss figures show an initial income amount in the 2020-21 financial year resulting in a small loss and an increase in income in the 2021-22 financial year resulting in a profit.
Your income for non-commercial loss purposes is above $250,000
Relevant legislative provisions
Income Tax Assessment Act 1997 - Section 35-1.
Income Tax Assessment Act 1997 - Subsection 35-10(2E).
Income Tax Assessment Act 1997 - Subsection 35-55(1)
Income Tax Assessment Act 1997 - Paragraph 35-55(1)(c).
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