An exception to the non-commercial loss rules allows net losses from excepted activities to be claimed in the year incurred. To be eligible your assessable income from other sources not related to that particular business activity in the income year must be less than $40,000, excluding any net capital gains.
A professional arts business is a type of 'excepted activity'.
If an individual was running a professional arts business which incurred a loss, and their income from other sources was below $40,000, can they choose not to apply their business losses if they don't meet any of the four non-commercial loss tests?
If their income from other sources is already below the tax free threshold then applying their losses would be a waste. Can they then choose to just follow the non-commercial loss rules that all other businesses have to follow and defer their losses to later income years?
The ATO states that an exception to the non-commercial loss rules allows net losses to be claimed from excepted activities in the year they occur, but it doesn't say that it requires them to do so.
Can an individual use their own discretion to opt out of this exception to the rules?
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