New tax rules for high earners

Written on the 2 December 2010

SEP 2010

THOSE earning $250,000 or more may be affected by changes to the non-commercial loss rules when working out whether to claim losses.

The purpose of the non-commercial loss rules is to work out whether executives can claim business loss against income from other sources such as salary and wages.

Non-commercial loss rules only apply to individuals who conduct business as a sole trader or in a partnership.

Those with incomes in the $250,000 plus category may no longer be able to deduct business losses against other income.

Another change includes a new exception for business losses caused solely by deductions claimed for the small business and general business tax break.
The final change is a new commissioner’s discretion for individuals who do not meet the income test. This discretion is available where the loss occurs because there is a time lag between starting the business activity and the production of income.


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