John owns a negatively geared investment property and also operates a small business. The rental loss from his property can be offset against:
Correct Answer
C) His total assessable income for the year, including his business income.
An individual's net rental loss is a deduction against total assessable income for the same income year, so it reduces tax on salary, business profits and investment income alike. Any loss not absorbed is carried forward as a tax loss. The non-commercial loss rules in Division 35 target business activities, not passive rental investment, so they do not normally restrict negative gearing.
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John owns a negatively geared investment property with annual rental income of $28,000 and deductible expenses of $35,000. If his marginal tax rate is 37%, what is his net after-tax loss?