Alex operates a child minding business in a 50/50 partnership with her daughter. This activity commenced in the year ended 30 June 2003.
The business records for this activity for the year ended 30 June 2003 show the following results.
P/ship |
Alex's share |
|
Total business income |
$8,000 |
$4,000 |
Total expenses |
$10,000 |
$5,000 |
Net income or loss for 2003 |
$2,000/L |
$1,000/L |
For the income year 2003:
- the primary production and professional artists business exception in subsection 35-10(4) does not apply
- the activity does not satisfy any of the four tests in Division 35:
- the assessable income test (s35-30)
- the profits test (s35-35)
- the real property test (s35-40)
- the other assets test (s35-45), and
- the Commissioner's discretion in s35-55 has not been exercised.
Alex also earned salary and wage income of $15,000 during the 2003 income year. Alex cannot deduct the loss of $1,000 against her salary and wage income for the 2003 income year. She must defer the loss to the next income year that the activity, or one of a similar kind, is carried on.
Tax return completion
Alex's tax return would include the following details:
Alex will also require a copy of the 2003 Business and Professional Items schedule (BPI) and the 2003 Taxpack supplement (Supp).
Item |
Label |
Amount |
Comment |
12 (Supp) |
O |
1,000/L |
Alex's distribution from the partnership for 2003 |
Net non-PP distribution |
1,000/L |
||
P3 (BPI) |
B |
1 |
Number of business activities |
P4 (BPI) |
C2 |
X |
Commenced business |
P9 (BPI) |
D |
Child Minding |
|
E |
95295 |
ANZSIC code required for tax agent prepared returns |
|
F |
P |
||
G |
8 |
Loss is required to be deferred |
|
H |
nil |
No prior year deferred non-commercial loss from this activity |
|
I |
1,000 |
Net loss for 2002-03 for this activity |
|
15 (Supp) |
F |
1,000 |
See item P9, label I |
H |
1,000 |
The sum of F & G |