This section relates to income and losses you have from partnerships. Complete this section if you received, or were entitled to:
- income or loss from a partnership
- a credit for amounts of tax paid on, or amounts withheld from, partnership income
- a share of the 'National Rental Affordability Scheme' tax offset.
Things to know
A partnership doesn’t pay tax on its income however, there must be a partnership tax return lodged declaring the income earned and the deductible expenses. It will also show the distribution of the net income or losses between the partners.
Each partner must lodge an individual tax return declaring their share of the partnership's net income or loss, whether or not they actually received the income.
If the partnership in which you were a partner paid you salary, wages or allowances you must show that income at this section.
Remember, you can't claim a deduction for:
- amounts already claimed by the partnership, or
- expenses incurred in deriving exempt income or non-assessable non-exempt income.
If you have deferred non-commercial business losses from a prior year, you may be able to claim them in 2019–20 if you operated the same or a similar business activity.
See also
Do not show at this section
Don't show the following income, losses or offsets at this section:
- Interest you received, or were credited with, from a joint account, where you quoted your individual tax file number to the financial institution, go to Interest.
- Income from a corporate limited partnership, go to Dividends.
- A capital gain or a capital loss in respect of your interest in a partnership or a partnership asset, go to Capital gains or losses.
- Any distribution in relation to a foreign resident capital gains withholding credit, go to Capital gains or losses.
- Attributed foreign income from a partnership (unless instructed otherwise), go to Foreign entities.
- Any Australian franking credits from a New Zealand franking company, go to Other foreign income. Note you can't claim New Zealand imputation credits.
- Any other foreign source income from a partnership (unless instructed otherwise), go to Other foreign income.
- Rent derived jointly (or in common) with another person from a jointly held property where you were not a member of a partnership carrying on a business of renting out properties, go to Rent.
- Your entitlement to an early stage venture capital limited partnership (ESVCLP) tax offset as a partner in a partnership, go to Early stage venture capital limited partnership.
- Your entitlement to an early stage investor tax offset as a partner in a partnership, go to Early stage investor.
Completing this section
To complete this section you will need:
- a statement of distribution or advice from the partnership
- details of any expense and franking credit information.
We pre-fill your tax return with partnership distributions provided to us. Check them and add any distribution information that has not pre-filled.
To personalise your return to show partnerships, at Personalise return select:
- You were a sole trader or had business income or losses, partnership or trust distributions (not from a managed fund)
- Partnerships
To show your partnership details, at Prepare return select 'Add/Edit' at the Business/sole trader, partnership and trust income (including loss details) banner.
At the Partnerships banner:
- For each partnership distribution that has been pre-filled in your tax return, add any distribution information not pre-filled.
- For each partnership distribution that has not been pre-filled in your tax return, select Add.
- Enter your partnership name.
- Show your share of partnership Primary production income or loss and deductions in the corresponding fields (myTax will automatically calculate the Net primary production amount).
The Depreciation and capital allowances tool can help you to work out any decline in value. It can also work out any deductible balancing adjustment when you stop holding a depreciating asset. Access this tool in the Deductions section on the Prepare return screen.
Fields from this tool can't be adjusted in myTax. To make any adjustments, or to add new assets to the tool, select the 'Use the depreciation and capital allowances tool' link. - If you show an amount at Other deductions, select one of the following Type codes:
- D – if all of the amount consists of prior year deferred non-commercial business losses.
- N – if none of the amount consists of prior year deferred non-commercial business losses.
- P – if only part of the amount consists of prior year deferred non-commercial business losses.
- Show your share of partnership Non-primary production income or loss and deductions in the corresponding fields (myTax will automatically calculate the Net non-primary production amount).
Distributions from partnerships less foreign income
Your share of any franked distributions (that may be shown on your distribution statement from the partnership) is included at this field. The amount should include the amount of any attached franking credits.
The Depreciation and capital allowances tool can help you to work out any decline in value. It can also work out any deductible balancing adjustment when you stop holding a depreciating asset. Access this tool in the Deductions section on the Prepare return screen.
Fields from this tool can't be adjusted in myTax. To make any adjustments, or to add new assets to the tool, select the 'Use the depreciation and capital allowances tool' link. - If you show an amount at Other deductions, select one of the following Type codes:
- D – if all of the amount consists of prior year deferred non-commercial business losses
- N – if none of the amount consists of prior year deferred non-commercial business losses
- P – if only part of the amount consists of prior year deferred non-commercial business losses.
- Show your partnership share of credits from income and tax offsets in the corresponding fields.
- Franking credits from franked dividends – you can only claim a share of a franking credit which relates to the share of a franked dividend paid to a partnership which is indirectly included in the amount of partnership income or loss you show at Distribution from partnerships less foreign income.
- Credit for foreign resident withholding amounts (excluding capital gains) – include income you:
- received as an Australian resident where an amount of tax was withheld because of the imposition of non-resident withholding tax or managed investment trust withholding tax
- derived as a foreign resident from which an amount of tax was withheld because of the operation of the foreign resident withholding rules.
- Select Save.
- Select Save and continue when you have completed the Business/sole trader, partnership and trust income section.
Notes:
- MyTax may remind you of partnership distribution amounts you need to include at Other foreign income.
- If you received, or were entitled to partnership income as a special professional you must also enter the amount of your taxable professional income in the Other income section. This includes income from activities as an author, an inventor, performing artist, production associate or active sportsperson.
- If you conducted a business activity as a partner in a partnership that resulted in a loss, or resulted in a loss after deducting your expenses, you must complete Loss details.
- You may be entitled to the small business income tax offset if either of the following apply:
- your partnership distribution included a share of net small business income
- you had a farm management repayment or other amount you received as a partner in a small business entity.
See also
Statement of distribution or advice from the partnership
A statement of distribution or advice from the partnership may show the following details in relation to your share of partnership distribution for tax purposes:
- the amount of any primary production income or loss and the amount of any non-primary production income or loss
- the amount of attributed foreign income and other foreign source income
- the amount of any income on which family trust distribution tax or trustee beneficiary non-disclosure tax has been paid
- your entitlement to any of the following credits or tax offsets
- credit for amounts of tax withheld because the partnership failed to quote its Australian business number
- credit for amounts of tax withheld due to the imposition of non-resident withholding tax or managed investment trust withholding tax from partnership income you received when you were a resident
- share of the 'national rental affordability scheme' tax offset
- allowable franking credits from franked dividends
- credit for tax file number amounts withheld.
If you think that any details are wrong or are missing from the statement of distribution or advice you received from the partnership, contact the managing partner.
You should not receive a distribution of a net capital gain or a net capital loss from a partnership. For information about how a partner shows their share of a capital gain or capital loss, see Guide to capital gains tax.
Next step
Expense and franking credit information
Find out about
Primary production
Visit Primary production activities to learn more about who is a primary producer.
Landcare operations and business deduction for decline in value of water facility, fencing asset and fodder storage asset
A partnership can't claim the expenses it incurred as a partnership for eligible expenses on landcare operations, water facilities, fencing assets or fodder storage assets. Costs the partnership incurred are allocated to each partner who can claim the deduction.
Include at Landcare operations and business deduction for decline in value of water facility, fencing asset and fodder storage asset your share of the expenses that relate to primary production income or loss from partnerships that you can deduct this year.
See also
Other deductions
Include at Other deductions the amount you can claim in relation to your share of primary production income or loss from a partnership.
You can claim a deduction in relation to your share of eligible expenses the partnership incurred on horticultural plants, grapevines, electricity connections or phone lines.
You generally can't deduct spending on capital assets immediately; instead you claim the cost over time, reflecting the asset's depreciation (or decline in value).
You can claim a non-commercial business loss deferred from a prior year only if it relates to a partnership activity that is the same as, or similar to, your current year partnership activity.
You may need to reduce the deferred non-commercial business loss deduction you can claim in 2019–20 if you earned net exempt income in 2019–20. For more information see How to offset your losses.
If you became bankrupt (or received a relief from debt) the deferred losses will no longer be available. The loss can't be deducted in 2019–20 or any future year.
For more information about how exempt income and bankruptcy affect deferred non-commercial business losses, phone 13 28 66.
See also
Non-primary production
Landcare operations expenses
A partnership can't claim the expenses it incurred as a partnership for eligible expenses on landcare operations. Costs the partnership incurred are allocated to each partner who can claim the deduction.
Include at Landcare operations expenses your share of the expenses that relate to non-primary production income or loss from partnerships that you can deduct this year.
See also
Other deductions
Include at Other deductions the amount you can claim in relation to your share of non-primary production income or loss from a partnership.
You can claim a deduction in relation to your share of eligible expenses the partnership incurred on electricity connections.
You generally can't deduct spending on capital assets immediately; instead you claim the cost over time, reflecting the asset's depreciation (or decline in value).
You can claim a non-commercial business loss deferred from a prior year only if it relates to a partnership activity that is the same as, or similar to, your current year partnership activity.
You may need to reduce the deferred non-commercial business loss deduction you can claim in 2019–20 if you earned net exempt income in 2019–20. For more information see How to offset your losses.
If you became bankrupt (or received a relief from debt) the deferred losses will no longer be available. The loss can't be deducted in 2019–20 or any future year.
For more information about how exempt income and bankruptcy affect deferred non-commercial business losses, phone 13 28 66.
See also
Franking credits
Enter your share of any allowable franking credits which you are entitled to claim as a franking tax offset through a partnership at Franking credit from franked dividends.
You can only claim a share of a franking credit which relates to the share of a franked dividend paid to a partnership which is indirectly included in the amount of partnership income or loss you show at Distribution from partnerships less foreign income.
Therefore, you can't claim a franking credit for a dividend paid to the partnership which was exempt income or non-assessable non-exempt income.
In addition, you may not be entitled to claim the franking credits if:
- within 45 days of buying the shares (90 days for certain preference shares), you either sold them or entered into an arrangement to reduce the risk of making a loss on them
- you were under an obligation to make, or were likely to make, a related payment, or
- you received a dividend as a result of a dividend washing arrangement.
These rules apply to your interests in the shares held by the partnership in the same way that the rules apply to shares you own directly.
For more information on these rules, see When you are not entitled to claim a franking tax offset.
These myTax 2020 instructions are about income or loss from partnerships.