Most taxpayers correctly calculate and utilise their losses. But there are a number of mistakes made every year, even by taxpayers with agents.

Below are some points to check when you are completing tax returns for clients with losses. This list is based on some of the common mistakes made by taxpayers with losses, and is not a full checklist.

All taxpayers with losses brought forward from last year

Has the loss brought forward been adjusted, as appropriate, for:

	audits or voluntary disclosures that have changed the amount of loss available?
	usage of the losses to pay shortfall penalties or foreign dividend payments?
	loss offsets made after the return was filed?

Companies with losses brought forward from last year

Has the company maintained 49% shareholder continuity?

	If the company has made losses in more than one year, have you checked continuity for each year of loss separately from the beginning of the income year in which the loss was incurred until the end of the income year in which it is offset?
	Have you checked for ownership changes at ultimate shareholder level, subject to any tracing concessions that can be claimed?

Have you checked whether the company has had a market value circumstance?

If the company has had a market value circumstance at any time during the continuity period, has it maintained 49% continuity of market value interests?

Companies that have made loss offsets or received subvention payments

Did the company have 66% common ownership with the company that received the loss?

	If the company has made losses in more than one year, have you checked continuity for each year of loss separately from the beginning of the income year in which the loss was incurred until the end of the income year in which it is offset?
	Have you checked for ownership changes at ultimate shareholder level, subject to any tracing concessions that can be claimed?

Have you checked whether the company has had a market value circumstance?

If the company has had a market value circumstance at any time during the continuity period, has it maintained 66% common ownership by market value interests?

Is the total of all loss offsets made by the company less than or equal to the net available loss?

If the loss transfer is made by way of subvention payment, will the payment be made by the 31 March deadline for filing the income tax return for the year of offset?

Will the Commissioner be notified of the loss offset or subvention payment by the 31 March deadline for filing the income tax return for the year of offset?

Trusts with losses

Check that losses have not been passed to beneficiaries.

Individuals with losses

	If the individual has been declared bankrupt, check that none of the loss relates to debts the individual has been discharged from paying.
	Check that the individual is not claiming any allocations of losses from trusts.