Discuss the deductibility of the following two expenses for Jacob

(i) $1,200 expense (1 mark); and

(ii) The highest deduction he can take for the $3,000 machinery this financial year (ignoring any small business write-offs) (3 marks).

Jacob works as a labourer/tradesman on various job sites. His work is very physical and this year he decides he needs to be better prepared for his work environment. He spends $1,200 on a gym membership so that he can stay fit and be able to perform his job to the best of his abilities.

On 1 February 2020, on the way home from his worksite, Jacob passes the local hardware store to purchase a new item of machinery for his work. The machine cost $3,000 and has an effective life of 3 years. He estimates that he will use the machine 70% for work and the remainder of the time he will use it to do odd jobs at his home.

(TAXATION LAW SUBJECT)