You can deduct a loss arising from the carrying on or carrying out of a profit-making undertaking or plan if any profit from that plan would have been included in your assessable income by section 15-15 (which is about profit-making undertakings and plans).
When section does not apply
You cannot deduct a loss under subsection (1) if the loss arises in respect of the sale of property acquired on or after 20 September 1985.
If you sell property you acquired
20 September 1985 for profit-making by sale, you may be able to deduct a loss on the sale: see section
Income Tax Assessment Act 1936
Notice to Commissioner
You can deduct a loss under subsection (1), insofar as it arises in respect of property, only if:
(a) you notified the Commissioner that you acquired the property for the purpose of profit-making by sale or for the carrying on or carrying out of any profit-making undertaking or plan (however described); or
(b) the Commissioner is satisfied that you acquired the property for either of those purposes.
When notice must have been given
The notice must have been given at or before the time you lodged your
income tax return:
(a) for the income year in which you acquired the property; or
(b) if you were not required to lodge an income tax return for that income year
for the first income year after that income year for which you
required to lodge one.