2. Fred White and his wife Maggie formed a partnership to run a fashion boutique.

Their partnership agreement is that:

• Fred will Receive 25 % of the net partnership income.

The partnership net income for the year ended 30 June 2020 is a $60,000 loss before the following item:

• Interest payable of $4000 to Fred related to a loan that he made to the partnership.

Required:

Determine the net income of the partnership for the year ended 30 June 2020 and the assessable income of the partners. Explain your taxation treatment of each item in arriving at your answer.