If your business activity is an excepted activity then the non-commercial loss rules don’t apply. You can claim your business loss against your other income in the same income year and may contribute to a tax loss for the income year. You don’t need to apply the other steps in the process.

Exceptedmeaning

Accepted vsexcepted

We refer to certain primary production and professional arts business activities as ‘excepted business activities’. Loss-making businesses in primary production or professional arts are 'excepted business activities' if your income from other sources is less than $40,000 (excluding any net capital gains).

Mary also worked part time in a café, earning $38,000. Because Mary’s other income (from the café) is less than $40,000 and she carries on a primary production business her business is an excepted business activity. Mary can deduct the primary production loss from the café income, i.e.:

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Exceptedsynonym

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The Australian Taxation Office acknowledges the Traditional Owners and Custodians of Country throughout Australia and their continuing connection to land, waters and community. We pay our respect to their cultures, Elders past, present and emerging.

If your business is an ‘excepted business activity’ and you make a loss from those activities, you may be able to deduct your business losses from other income in the same income year.