Prompt: Assessable income from other sources must be less than $40,000

Guidance: 

ATO does not allow Business Loss Code “6” to be used when your income exceeds a certain threshold.

Why the Error Appears

The ATO checks the following total:

Taxable income or loss

  • Net loss

  • Total deductions
    − Net capital gain

If the result is more than $40,000, Code “6” cannot be selected.

 

Illustration:

  • Taxable income: $62,670

  • Net loss: $7,350

  • Total deductions: $150

  • Net capital gain: $0

Total: $70,170 (exceeds $40,000)

Because this amount is over the limit, the ATO rejects Code “6”.


To resolve: 

Business Schedule → Business Loss Activity Details (P9)


Option 1: Select a Different Code

Via Business loss activity code, select a different code that applies to your situation.

Option 2: Defer Loss 

Remove Code “6” from the Business loss activity code field.

Defer the loss according to ATO rules, learn more here