Follow the instructions below:
The taxpayer will meet the income requirement and have access to the four tests if the total of the following amounts is less than $250,000:
Taxable income- Any business losses the taxpayer is claiming at item P9 will be ignored when working out this amount. If the taxpayer had a loss, zero is used for this calculation.
Total reportable fringe benefits - Income Tests item IT1.
Reportable superannuation contributions - Income Tests item IT2.
Net investment losses – total of financial investment losses shown at Income Tests item IT5 and rental properties losses shown at Income Tests item IT6.
less Primary production losses carried forward to later income years (item L1 label Q less item L1 label F).
less Non-primary production losses carried forward to later income years (item L1 label R less item L1 label Z).
If the taxpayer does not meet the income requirement, they will have to defer their loss unless the Commissioner has exercised his discretion or ruled that it will be exercised.
In addition, please ensure to fill in All other amounts field. Please follow the instructions below:
Navigate to Income.
Go to 16. Deferred non-commercial business losses.
Click Next Ensure to complete 'All other amounts' field.
A copy of the formula used to calculate income for this test can be found at https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/losses/non-commercial-losses?=redirected_ncl