Jemma is a large lady, who is a fulltime account executive with a major retail store. In her spare time Jemma is an avid amateur squash player who also designs and makes squash clothes in larger sizes for women. Even though Jemma is an enthusiastic player, she does not do that well at the game of squash. However, she does have a flair for clothing design and she takes her squash gear to all of the events she participates in and sells the clothes she has made to other lady squash players.

Jemma takes clothing orders from the ladies and makes clothes to measure. Jemma attended two clothes design courses at her local TAFE. The cost for those courses was $2,000. She also had a small catalogue, listing all available items, and hands that out at all the squash tournaments that she attends. The cost of the catalogue was $1,000. Jemma is feeling confident that her clothing line will be a big success. During the 2018-2019 year she attended 20 competitions. She won one tournament during the year and received prize money of $500. She also sold clothing to the value of $20,000.

Discuss the tax implications of the amounts she received and the expenses incurred.

Your answer must be supported by reference to legislation, case law and tax rulings (if any).