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Edited version of private advice
Authorisation Number: 1052267147224
Date of advice: 23 July 2024
Ruling
Subject: Commissioner's discretion - special circumstances
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 20YY-YY to 20YY-YY financial years?
Answer
Yes.
This ruling applies for the following period:
1 July20XX to 30 June 20XX
The scheme commenced on:
1 July 20XX
Relevant facts and circumstances
You carry on a primary production business.
You commenced business operations in the XXX financial year.
In the XXX-to-XXX financial years, drought affected the profitability of your business activity.
In the drought year, you produced less agricultural produce resulting in less profit and incurred more expenses counteracting the effects of the drought.
You've undertaken steps to mitigate the drought impact in future years.
You expect your business activity to return to profit in the XXX financial year.
You provided profit and loss statements for the XXX-to-XXX financial years.
Your business has previously produced a profit.
You provided records of the of the drought event from an independent source.
You do not satisfy the less than $250,000 income requirement set out in subsection 35-10(2E) of the ITAA 1997.
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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