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Edited version of your private ruling
Authorisation Number: 1012605585646
Ruling
Subject: Non-commercial losses
Does the repayment of funds from a farm management deposit (FMD) cause you to fail the income requirement of subsection 35-102(E) of the IITAA 1997?
Answer
No.
This ruling applies for the following period:
Year ending 30 June 2013
The scheme commenced on
1 July 2012
Relevant facts and circumstances
You conduct a primary production business of sheep raising and cropping.
All eligibility rules for FMD have been satisfied.
In the 2012-13 financial year you withdrew an amount from your FMD account for use your primary production business.
Relevant legislative provisions
Income Tax Assessment Act 1997 - Division 393
Income Tax Assessment Act 1997 - Subsection 35-10(2E)
Reasons for decision
The assessable income that arises from the operation of Division 393 ITAA is considered assessable income 'from' the business activity when:
(a) applying the loss deferral rule in Division 35, in subsection 35-10(2) of the ITAA 1997; and/or
(b) determining whether the assessable income test in section 35-30 of the ITAA 1997 has been satisfied.
The income repaid from the FMD is considered to be income from the business activity and your income from unrelated sources is less than $250,000. Therefore, you satisfy the income requirement under subsection 35-10(2E) of the ITAA 1997.