Stan commenced his computer consultancy business in 2003. The business records for this activity for the year ended 30 June 2003 show the following results (included in Item P8 of the business and professional items (BPI) schedule).
Total business income |
$5,500 |
Total expenses |
$7,500 |
Net income or loss for 2003 |
$2,000/L |
Stan also earned salary and wage income of $52,000 in the 2003 income year.
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.
Stan cannot deduct the loss of $2,000 against his salary and wage income for the 2003 income year. He must defer this loss to the next income year that the activity, or one of a similar kind, is carried on.
Tax return completion
Stan's tax return would include the following details:
Stan will also require a copy of the 2003 Business and Professional Items schedule (BPI) and the 2003 Taxpack supplement (Supp).
Item |
Label |
Amount |
Comment |
P8 (BPI) |
Total business income |
5,500 |
|
Total |
7,500 |
Total expenses |
|
C |
2,000/L |
Total business income less total expenses |
|
E |
nil |
Deferred non-commercial loss from the prior year |
|
Z |
2,000/L |
Transfer to Item 14 label C |
|
14 (Supp) |
C |
2,000/L |
From item P8 label Z |
P3 (BPI) |
B |
1 |
Number of business activities |
P4 (BPI) |
C2 |
X |
Commenced business |
P9 (BPI) |
D |
Computer Consultancy |
|
E |
78349 |
ANZSIC code required for tax agent prepared returns |
|
F |
S |
||
G |
8 |
Loss is required to be deferred |
|
H |
0 |
No prior year deferred non-commercial loss from this activity |
|
I |
2,000 |
Net loss for 2002-03 for this business activity |
|
15 (Supp) |
G |
2,000 |
See item P9, label I |
H |
2,000 |
The sum of F & G |