Elizabeth is an accountant who is employed by a second tier accounting firm in Brisbane. During the current income year ended 30 June she had the following expenses:

• Elizabeth paid $5000 for the costs of new business suits and work clothing. Although there is no corporate uniform, Elizabeth is required by her employer to dress professionally at all times.

• Elizabeth calculates that the cost of using her home office during the income year was $2000. This included depreciation on her computer (apportioned for private use), stationary items, and a portion of telephone calls. She has one room set aside at home as an office the expenses are reasonably attributed to her time spent working on client files at home.

Based on these transactions, which of the following statements is most correct?

Select one:

1. Elizabeth would be likely to be allowed a tax deduction for the running expenses for her home office based on the principles outlined in TR 93/30.

2. Elizabeth would be likely to be allowed a tax deduction for the costs of the new clothing under s 34-10 ITAA 97.

3. Elizabeths total deduction for the current income tax year would be $7000.

4. Elizabeth would be likely to be allowed a tax deduction for the costs of the new clothing based on the principles established in Edwards case.

5. Elizabeth would not be likely to be allowed a tax deduction for the running expenses for her home office based on the principles outlined in TR 93/30.