If you are not able to deduct your business activity loss in the current year because of the non-commercial loss rules, you will need to defer your loss for use in a later year.

Changes to the operation of the non-commercial loss rules apply from 2009-10 onwards.

The key changes include:

  • the introduction of an income requirement to limit the circumstances when a business loss can offset other income – to meet the income requirement, your income for non-commercial loss purposes must be less than $250,000
  • a new exception for business losses caused solely by deductions claimed for the small business and general business tax break
  • a new Commissioner’s discretion for individuals who do not meet the income requirement but whose business activity is subject to a lead time
  • ensuring existing Commissioner’s discretions continue to apply.