Income Tax Assessment Act 1997

CHAPTER 2 - LIABILITY RULES OF GENERAL APPLICATION  

PART 2-5 - RULES ABOUT DEDUCTIBILITY OF PARTICULAR KINDS OF AMOUNTS  

Division 25 - Some amounts you can deduct  

Operative provisions  

SECTION 25-40   Loss from profit-making undertaking or plan  

25-40(1)    
You can deduct a loss arising from the carrying on or carrying out of a profit-making undertaking or plan if any profit from that plan would have been included in your assessable income by section 15-15 (which is about profit-making undertakings and plans).

When section does not apply

25-40(2)    
You cannot deduct a loss under subsection (1) if the loss arises in respect of the sale of property acquired on or after 20 September 1985.

Note:

If you sell property you acquired before 20 September 1985 for profit-making by sale, you may be able to deduct a loss on the sale: see section 52 of the Income Tax Assessment Act 1936 .

Notice to Commissioner

25-40(3)    
You can deduct a loss under subsection (1), insofar as it arises in respect of property, only if:

(a) you notified the Commissioner that you acquired the property for the purpose of profit-making by sale or for the carrying on or carrying out of any profit-making undertaking or plan (however described); or

(b) the Commissioner is satisfied that you acquired the property for either of those purposes.

When notice must have been given

25-40(4)    
The notice must have been given at or before the time you lodged your ^* income tax return:

(a) for the income year in which you acquired the property; or

(b) if you were not required to lodge an income tax return for that income year - for the first income year after that income year for which you were required to lodge one.