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If you have a tax debt written off, balances carried forward will be extinguished at the same time as the write-off.

This is so you do not benefit twice by:

  • having the debt written-off
  • still being able to carry forward balances to future years.

How extinguishing balances work

Balances are extinguished in the following order:

  • tax losses
  • excess residential rental deductions (ring-fenced residential rental losses)
  • bright-line losses
  • excess imputation credits.

These are extinguished in proportion to the amount of debt written off.

Adjusted carried forward balances

We will send confirmation of your adjusted carried forward balances when the write off occurs. Please keep this information.

Include the new details in your income tax return (except for bright-line losses).

If you file in myIR or Gateway services, the adjusted balances will be pre-populated.

Bright-line losses

Bright-line losses carried forward are not included in income tax returns. Keep a record of this balance yourself.

If you apply for financial relief, you need to tell us about any bright-line losses you are carrying forward to future years.

If we extinguish all or part of your bright-line losses carried forward, we will send you confirmation of your adjusted balance. Use this to update your records.

Last updated: 01 Apr 2024
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