Jenny and Michael purchase a rental property as co - owners .

Michael earns other income from employment .

Jenny has no other income .

They agree to share profits and losses from the property as follows :

-Profits are to be distributed 20 % to Michael and 80 % to Jenny .

-Losses are to be distributed 80 % to Michael and 20 % to Jenny .

Q1 - If the net income for the property for the year amounts to $ 10,000 , how much will Michael need to declare as assessable income in his tax return ?

Q2 - If the expenses for the property exceed the income the property produced , can Mitchell claim 80 % of the loss ?