If the non-commercial loss rules apply and you don’t satisfy the income requirement or pass any of the four tests, (and you aren’t carrying on an excepted business), you must defer your loss. You can’t offset your loss against any other income you earn in the year you made it. Your deferred loss can be deducted in the next year you earn income from the same business activity and must be claimed against that activity.

The loss (or part of it) may be deferred multiple times until either:

• you have income from the activity against which to offset the loss
• you meet the requirements so the non-commercial loss rules don’t apply, or
• the Commissioner exercises their discretion to allow you to offset the loss against your other income.

There’s no time limit on how long you can defer your losses. Each income year, you need to work out if the non-commercial loss rules apply, to again defer the loss.