In August 2019, Macho Sports Ltd, a manufacturer of sporting equipment decided to diversify its operations by developing a range of sporting clothing. As a result, it spent $50,000 in an investigation of whether it would be feasible.

In March 2020, it launched a new clothing range with an initial advertising campaign of $250,000. It also paid ten stores in Melbourne $5,000 to exclusively stock their new Macho Sports Clothing range.

Advise Macho Sports Ltd as to whether any of the above expenditures are tax deductible for the year ending June 2020.

On 1 June 2020, Macho Sports entered into a contract for the sale of the clothing business (excluding the trade mark and business name Machos Sports Clothing) for $500,000. Macho Sports incurred $11,000 in legal and accounting fees associated with the sale (including GST). Advise Macho Sports on any GST consequences of the sale. Make sure you include any applicable GST calculations