My sole trader business reported a loss in 2021 - 2022. The business could not pass the four tests of the non-commercial loss rules. Therefore, the loss was reported as a deferred loss in the 2021-2022 tax return.
I operated the same business in 2023 and made a taxable profit before claiming any prior year deferred losses. However, in the 2022-2023 year too, the business could not pass the four tests of the non-commercial loss rules.
After reading the ATO publications, I understand that I can't claim the deferred loss from my other income (such as employment income, interest income, etc...) in 2022-2023 unless the business can pass the four tests of the non-commercial loss rules.
If someone can, please clarify whether I am entitled to offset the 2021-2022 deferred loss up to the business profit in 2022-2023 from the same business that resulted in the deferred loss and then carry forward any remaining loss as deferred loss in the 2022-2023 income tax return as the business can't satisfy the four tests of the non-commercial loss rules.
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