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03 Sep 14 Taxpayer has mixed success with non-commercial losses special circumstances - Bentivoglio

The AAT has held, in an application for review of an objection decision in relation to a private ruling, that the taxpayer, a medical practitioner who also was an olive grower and producer of olive oil, should be granted relief from the non-commercial loss provisions in Div 35 of ITAA 1997 (specifically s 35-10(2)) for the 2010 to 2013 income years on the basis of special circumstances, but not for the 2014 income year.

The taxpayer had a number of special circumstances that affected his olive and olive oil production in the 2010 to 2013 income years, including lace bug, drought, fire and the illness of his wife, an experienced olive oil maker and blender. As a result, the AAT was satisfied that it would be unreasonable to apply the rule in s 35-10(2) ITAA 1997 to deny the losses incurred by the taxpayer in each of the 2010, 2011, 2012 and 2013 income years. In contrast, the AAT concluded that any losses incurred in the 2014 year could not be attributed to the ongoing impact of those special circumstances. It therefore held that it was not unreasonable to apply the rule in s 35-10(2) in respect of the losses of the 2014 year.

Bentivoglio and FCT [2014] AATA 620 (AAT, Frost DP, 2 September 2014).


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