Response to the following problem:
Mick is a resident taxpayer who is employed full-time as a lecturer at the University of Newcastle. In 2016 Mick became aware of an opportunity to purchase a large parcel of vacant land in the now defunct railway corridor in Newcastle West. With the opening of the University's NewSpace building in the adjacent area, Mick sees potential for the building of a multi-story complex that will provide private, short-term student accommodation and a mix of retail and café spaces. On July 1, 2016 he borrowed $3,2000,000 from CBC Bank and acquired the land. Mick has commenced the process of gaining approval for the development however that process will not be complete until at least March 2018. The building project is not expected to commence until September 2018. Mick has not previously been involved in property development.
On 1 August 2016 Mick was approached by Bruno who owns a neighbouring earthmoving business regarding renting Mick's vacant land as a site to store his earthmoving equipment. Mick agreed to rent the land to Bruno for a period of two years for $175 per week. During the 2017 taxation year annual interest, council rates and insurance in respect of the land amounted to $335,000. Mick also paid $29,000 to a firm of architects to develop some preliminary plans for the proposed building. Receipts from Bruno for use of the land amounted to $8,400.
Required:
In the form of a professional correspondence (not exceeding 500 words) advise Mick which payments relating to the land (if any) are allowable as an income tax deduction for the year ended 30 June 2017. Refer to case law, income tax rulings and sections of the Income Tax Assessment Acts.