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Edited version of private ruling
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Ruling
Subject: non-commercial losses
Question
Do the non-commercial loss provisions of Division 35 of the Income Tax Assessment Act 1997 (ITAA 1997) apply to your share of your partnership losses?
Answers
No.
This ruling applies for the following period
Year ended 30 June 2011
The scheme commenced on
1 July 2010
Relevant facts and circumstances
You are a member of a partnership which undertook an activity.
The partnership has received a ruling which states the partnership activity is not related to your business activity and is considered to be an isolated transaction.
Relevant legislative provisions
Income Tax Assessment Act 1997 Section 35-10.
Reasons for decision
Division 35 of the ITAA 1997 applies to losses from certain business activities for the year ended 30 June 2001 and subsequent years. The provisions only apply to individuals who conduct a business activity as either a sole trader or a partner in a partnership and made a loss from that business activity.
However, as your partnership activity is considered to be an isolated transaction not related to your business activities, the non-commercial loss provisions do not apply to defer the loss to a future year. Therefore you are entitled to claim a deduction for your share of the partnership losses in the year ended 30 June 2011.