Chloe Credit and Darren Debit carry on a public accountancy practice in partnership. The partnership agreement was entered into on 1 July 2012. As a starting point for the 2018 year, assume that the partnership derived assessable income of $500,000 and incurred deductions amounting to $300,000. The partnership does not utilise any of the small business entity concessions.

Additional Information (relating to the year ended 30 June 2018)

1. The partnership agreement allows for an annual 'salary' of $60,000 to be paid to Chloe to compensate her for the additional time she dedicates to the partnership in comparison with Darren. The residual profit or loss is to be shared equally.
2. During the year, Chloe's spouse John did some bookkeeping and data entry work for the partnership and was paid $25,000. However, the Commissioner of Taxation has informed the partnership that a payment of $10,000 would be considered appropriate for this work.
3. Darren derived $80,000 while working as a school teacher.
4. Interest of $5,000 has been paid by the partnership on a loan from Darren. The borrowed amount has been used by the partnership for working capital and the rate charged is a commercial one.
5. A net capital gain of $20,000 was realised on the disposal of a CGT asset which had been owned by the partnership. This asset was not a depreciating asset.
6. The partnership paid superannuation of $10,000 on behalf of Chloe into a complying superannuation fund. She is aged in her late 30s.
7. Chloe lodged her 2016 income tax return very late and was penalised $550 by the Australian Taxation Office. Since Chloe owed tax upon its lodgement, she also had to pay General Interest Charge amounting to $95.

(i) Based on the information provided, calculate the net income of the partnership and the taxable incomes of Chloe, Darren and John for the year ended 30 June 2018. Refer to relevant law in your calculations.

(ii) Assume the partnership's net income were $50,000. How would this be distributed to Chloe and Darren for tax purposes?

Fully justify your answers by providing a reasonably arguable position citing all relevant law. Remember to use the 'cite, describe and apply' method in your answers. Calculations of tax payable are not required