In relation to deductions, which of the following statements is most correct?

Select one:

1. Where an expense is deductible under a specific deduction provision and the general deduction provision you should claim the expense under the general deduction provision.

2. The general deduction provision has three limbs, positive, negative and neutral.

3. One of the negative limbs of section 8-1 provides that a taxpayer cannot deduct a loss or outgoing to the extent that it is incurred to earn salary and wage income.

4. Section 8-1 Income Tax Assessment Act 1997 replaced section 25(1) Income Tax Assessment Act 1936.

5. When testing the application of section 8-1 you should apply the positive limbs first and if these are satisfied you should test the negative limbs.