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

Select one:

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

2. 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.

3. 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.

4. 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.

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