1.Peter and Jill are in a partnership as retailers of electrical goods. The partnership records,
exclusive of GST, for this income year disclose:
Receipts ($):
300,000 Gross receipts from trading
Payments ($):
100,000 Purchases of trading stocks
30,000 Partners' salaries (each)
2,000 Interest on cash advance made to the partnership by Peter
60,000 Salaries for employees and rent paid
2,000 Legal expenses in recovering bad debts
 

 

Please explain why 30,000 Partners' salaries (each) are not a deductible expense,   is Partnership net income.

Please explain why Legal expenses in recovering bad debts are deductible expense？

Please explain why 2,000 Interest on cash advance made to the partnership by Peter are deductible expense？

 

 

I'll give an example of how to answer 

The expenses that Pete and Jill pay their employees as the owners of their company and the rent they pay for the commercial property that they lease are Revenue Expenditure. They are deductible under Section 8-1 of the ITAA 1997 because they are necessarily incurred in carrying on the business to earn or produce taxable income and are not part of any negative portion under Section 8-1. Per the facts, should not be a denied deduction under s 26-105.