Problem 1) Jessica paid $560 in fees to an accounting firm to prepare her previous year's tax return. She also paid the firm $1,500 to seek a private ruling about whether shares she had recently sold were subject to Capital Gains Tax.
Required: Advise Jessica on whether she is entitled to deductions for her expenditure.
Problem 2) Steve and Mark are partners in a partnership running a real state agency. They share profits and losses equally under the partnership agreement. In addition, Steve receives salaries of $50,000 every year from the partnership for taking on the daily management role in the agency. In this income year, the partnership makes a loss of $75,000 after deducting the salaries paid to Steve.
Required:
Explain the tax implications of Steve and Mark in this income year.