Hi All
A couple of questions regarding deductions:
1. In order to claim tax deductions from a previous year where the income was less than the tax free threshold, would a tax return have had to have been lodged in that previous year (establishing what the deductions are)?
2. For how many years can you rollover deductions?
That’s sounding very confusing. I hope someone can understand what I’m trying to say.
Thanks
Section 8-5 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction from assessable income where an amount is an allowable deduction under another provision of the Act.
Section 12-5 of the ITAA 1997 contains a list of provisions about specific types of deductions. Contained in this list is Division 36 of the ITAA 1997 with regard to tax losses from earlier income years.
A tax loss is calculated under section 36-10 of the ITAA 1997. Section 36-15 of the ITAA 1997 allows a tax loss for a loss year to be deducted in a later income year in the manner provided therein. If there is no net income and the taxpayer’s total income exceeds their total deductions (other than the tax loss) the tax loss is deducted from that excess.
You are entitled to carry forward the loss generated from your rental property to be deducted at a later date against future income.
A deduction under section 8-5 of the ITAA 1997 for a tax loss carried forward from earlier income year(s) will be allowable in the manner provided in section 36-15 of the ITAA 1997.
Thanks Coasty
Oshen,
I may have read your post incorrectly but just to clarify –
You will only be able to claim the loss if your deductions were greater than your income. If your deductions result in your income being between $0 – $6000, you will not be able to carry forward.
Cheers,
Mark Unwin
Williams Partners Pty Ltd
http://www.wp.com.au
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