Tax deductions from 08/09 carried over to 09/10

[jezzi]

Hello everyone!

Last financial year I sold my IP, and had nearly $40,000 worth of deductions. (negatively geared, plus a very large exit fee to the bank!).

Because I only worked half the year, my refund was small - I could only get back what I had paid in tax, which for that year was not all that much.

My question is - can I claim what didn't get used last financial year, in this financial year?

Thank you for any help!

 

[dr.jauncey]

Hi, yes, you can carry forward losses if your overall income was negative.

However if your overall income was below the tax-free threshold but still positive then you will not be able to use those deductions again in a subsequent year.

 

[jezzi]

Thank you!

Oooh, thank you so much for your help - my deductions were far more than my income last year, so I CAN claim again!!

Very excited

 

[dr.jauncey]

Hi, just to clarify, you cannot claim the same expenses again but can carry forward a loss and claim such loss next time instead. So next year you won't actually record those expenses again but instead just claim one total amount that matches your negative taxable income from the year before.

Also re-reading your initial post. Please note that capital losses will not count in the above and will roll forward to offset other capital gains only. While your examples of break fees and negative gearing are of course still deductible, a loss upon the sale of property may not be.