Question:  I have a new client with carried forward losses in her individual return. She has Primary Production Losses and Non Primary Losses.

Her income this year is Non Primary.

In the schedule at L1 the current year income is being automatically allocated as Primary production and reducing the balance carried forward. 

Solution: Our system will automatically capture the current year income as claim for prior period losses to "Primary Production" column as first priority. 

ie. input all amount via "Prior year Loss", then, system will auto apply.

Primary losses from previous year are claimed first. This is how Losses distribution works.  

ATO link

By default the system, will auto assigned the currrent year income to Primary Production Loss (Losses brought forward from earlier income year)

This example shows that the client has "Primary Production" and "Non Primary Production" 


In case, there is only one amount of prior loss present in the row "Losses brought forward from earlier income year, (either "Primary Production" or "Non-Primary Production" column) and there is a “Current Year Income”, then the system will automatically apply the income as “Losses claimed this income year” in column which contains the prior period loss.

and both applied "Losses brought forward from earlier income year"

See attached demo recording.