Private ruling: Non-commercial losses
Date of advice: 12 December 2018
Published: March 2019
Ruling period: Year ended 30 June 20XX
Date scheme commenced: 1 July 20XX

Ruling: Q1: Will the Commissioner exercise the discretion in paragraph 35-55(1)(c) of the Income Tax Assessment Act 1997 to allow you to include any losses from your primary production activity in your calculation of taxable income for the 20XX-XX financial year? | A1: Yes. Having regard to your full circumstances, it is accepted that it is in the nature of the business activity that has prevented you from making a profit. You will make a tax profit within the commercially viable period for your industry. Consequently the Commissioner will exercise his discretion for the 20XX-XX financial year. For more information on non-commercial losses, please visit our website ato.gov.au and search for quick code QC 33774.

Relevant facts and circumstances: Your income for non-commercial loss purposes for the 20XX-XX financial year is more than $250,000. You are carrying on a business (the activity) which commenced on XXX 20XX. Based on market value for your produce you expect to generate a profit in the 20XX-XX financial year. This is based on normal seasonal conditions. You have provided projections to show that you will make a profit within the commercially viable period for the industry.

Relevant legislative provisions: Income Tax Assessment Act 1997 subsection 35-10(1) | Income Tax Assessment Act 1997 subsection 35-10(2) | Income Tax Assessment Act 1997 subsection 35-10(2E) | Income Tax Assessment Act 1997 paragraph 35-55(1)(c)