This error occurs in the main form of an Individual Tax Return (I Form) when losses are incorrectly claimed in a year where total income is negative.
Check the total income and deductions. If the sum of all income minus all allowable deductions is less than zero, then losses claimed in the current year should be zero.
Review Item L1. If Label F and Label Z both show amounts greater than zero, and total income or deductions are less than zero, this will trigger the error.
Correct the form. Adjust the amounts at Item L1 so that no losses are claimed when the overall result is a loss.
If you need further help contact the ATO for assistance with this error.