Error: 
This error triggers when a business loss code of 8 (deferred non-commercial loss) is selected for Activity 1, 2, or 3 in the Business and professional items schedule, but no amounts appear in primary production deferred losses or non-primary production deferred losses at question 16. The total deferred loss must match the net loss sum from those activities
How to Resolve
Enter the deferred loss amount (split by primary/non-primary production) in the Deferred Losses section. Ensure the net loss from Business Loss Activity Details reflects this total to avoid overstatement of taxable income.
Related Guide:
How to use Deferred Business Losses
Carrying Forward Prior-Year Deferred Losses
For carry-forward losses (e.i., $12,526 from prior year with current-year loss of $0):
1. Enter $12,526 in Business > Business Income & Expenses as prior income.
2. Enter $-12,576 in the same tab to net to zero current impact.
3. Input $12,526 in Business > Deferred Losses (non-primary production).
4. Record $12,526 at Item I in Business Loss Activity Details using code 8.
This offsets the deferred loss against the activity without altering current taxable income, aligning with ATO rules for indefinite deferral until future profits or tests apply.
Related Guide:
How to use Deferred Business Losses
For full details, see ATO Business and professional items schedule instructions 2025 at P9