Can someone explain why is net financial investment loss part of Division 293 income? It's a loss, not an income. How can ATO tax a loss? If this loss is carried forward, will ATO retax it the following year?
This is simply how Div 293 income is defines.
Only current year losses are included.
From ATO
Division 293 income
The income component of the Division 293 tax calculation is based on the same income calculation used to determine the Medicare levy surcharge (MLS), disregarding any reportable superannuation contributions.
The components of this income calculation are:
These amounts are added up (except the super lump sum and assessable first home super saver released amount, which are subtracted) to give the income amount.
Looks like I may have filled in my tax return incorrectly by not claiming the amount of deferred losses from prior years, thus triggering this extra tax.
This is simply how Div 293 income is defines.
Only current year losses are included.
From ATO
Division 293 income
The income component of the Division 293 tax calculation is based on the same income calculation used to determine the Medicare levy surcharge (MLS), disregarding any reportable superannuation contributions.
The components of this income calculation are:
These amounts are added up (except the super lump sum and assessable first home super saver released amount, which are subtracted) to give the income amount.
@Bruce4Tax I think the point of the question was how a LOSS is part of income? I.e. is a $3k investment loss taken with a "minus" or actually a plus. It would be beyond belief if it was taken with a plus i.e. increased the income, but it's worth clarifying please? Because the document you quoted where it mentions "subtracted" and "added" is a bit confusing, it should ideally say a loss is subtracted - not added with a minus sign (which I hope it says!)
I think the point of the question was how a LOSS is part of income? I.e. is a $3k investment loss taken with a "minus" or actually a plus.
It means that 3 k loss has already been claimed as a deduction from taxable income,
so has to be added back to meet the definition of surcharge income.
Only confusing if you have not had the proper training in that area.
thanks @Bruce4Tax that indeed makes sense, and not beyond belief anymore!
Picking up an old thread ...
So any investment property losses are deducted to calculate net taxable income - cool save 45% tax.
Then if you over the Div 293 earnings limit (250k) the losses are added back into the calc and extra tax is paid?
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