Tax return - carrying forward investment loss

Hi all,

Appreciate any advice on the below - as I cannot find anything online to address the mechanics of how investment property tax losses are carried forward year on year in tax returns.

I understand that investment property tax deductible losses can we carried forward until a point in future when they can be offset against a positive portfolio.

However - how do I record these losses in the meantime? Do I just do my tax return once per year as per normal and let each individual year sit there in isolation (i.e. each year being slightly negative)? Or am I supposed to each year add in the tax loss from the preceding years so the negative snowball gets bigger and bigger? Where exactly on a tax return would you put previous years losses?

Or, do I just wait until the entire portfolio is generating cash in the years to come and then dig up all the historical losses and input them on a future tax return?

Thanks for any constructive input.

 

yes you would need to lodge a tax return. Your income would be negative though.

 

I have been diligently lodging tax returns for the past years.

My question is on the mechanics. Where exactly in this years tax return do I make reference to the losses I've made over the past few years?

Or... at the time my portfolio starts generating cash, do I then go back go back and add up manually all the past X years of negative tax returns and input them on the first year that they turn positive?

 

L1

 

Assuming that you have tax losses from IP with no other income that you can use to offset against those losses, you have to report losses from previous years at L1 Non-primary production losses carried forward from earlier income years.

 

and if the loss if from a foreign investment property it goes into Item 20 - Foreign source income and foreign assets or property.

Note capital losses carried forward don't go into this section they go into are accounted for in Item 18 - capital gains. net capital losses carried forward go into Item 18 - V

 

Property losses should offset other income eg salary, investments etc. Thats "negative gearing" in operation. Only when there is no other income do losses carry forward. eg a non-resident with property eg 2 positive geared for $6K and one a loss of $8K so a net loss of $2K occurs.

The way the personal return works it doesnt show the prior year loss amount and the current year loss amount to show a new loss carried forward. The taxpayer must take the 2018 L1 c/fwd from 2017 shown in the 2018 return and the 2018 current tax loss and include the total at L1 in the 2019 return.