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MR4(Dynamo)Dynamo
20 Nov 2022

A sole trader running 2 different business activities. Not similar activities.

Business (A) made $6,000 profit

Business (B) made ($1,000) loss


Business (B) doesn't meet the rule to offset the loss against other income. Can the loss however be offset against the profit from business (A) without the Commissioner's discretion.



I read everything possible about it. Articles, Tax practitioners and Ato staff gave different answers. Some say Yes because both activities under the same ABN. Others say No because they are different business activities and the business (B) didn't pass the test/rule.

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384 views
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CaroATO(Community Support)Community Support
23 Nov 2022

Hi @MR4,


When a sole trader lodges their tax return they'll combine their business income and deductions.


There is what's called non-commercial losses. This could be why there are some people saying no.


If the sole-trader doesn't meet the non-commercial loss rules they can claim the loss against other income.


Have a look at the information on our website where it talks about non-commercial losses.

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Most helpful reply

CaroATO(Community Support)Community Support
23 Nov 2022

Hi @MR4,


When a sole trader lodges their tax return they'll combine their business income and deductions.


There is what's called non-commercial losses. This could be why there are some people saying no.


If the sole-trader doesn't meet the non-commercial loss rules they can claim the loss against other income.


Have a look at the information on our website where it talks about non-commercial losses.

MR4(Dynamo)Dynamo
24 Nov 2022

@CaroATO


So the non-commercial rule is to offset the business loss from other income (but a not similar business activity profit, however, is not considered as other income), right?


I think you meant If the sole-trader doesn't meet the non-commercial loss rules they CAN’T claim the loss against other income.

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