Provide advice to Loretta on whether the items below are assessable income or allowable deductions under any section of the ITAA 1936 or ITAA 1997 for the year ended 30 June 2023. Calculate the net income or net loss on the property for the year ended 30 June 2023. Your answer should include references to applicable sections of Income Tax Assessment Acts, case law and rulings from the Australian Taxation Office.

Your client, Loretta purchased an apartment in Brisbane on 1 July 2022. The purchase price was $595,000. Loretta paid $95,000 from her savings and borrowed the remaining $500,000 from a bank. Loretta listed the property for rent with the real estate agent who had arranged the sale to Loretta. The apartment was rented for $450 per week for 50 weeks during the year ended 30 June 2023. The real estate agent charged commission of 10% for managing the property. Loretta incurred the following expenses during the year ended 30 June 2023 in respect of the apartment:

a) Queensland Government stamp duty on the purchase of the apartment, $17,500. b) Legal and search fees on the purchase of the apartment, $900. c) Loan application fee paid on 1 July 2022 to the bank for the loan, $700. Interest on the loan totalled $25,000. d) A quantity surveyors report estimated that the construction costs for the apartment were $300,000. The quantity surveyor charged $495 for the report on 15 July 2022. e) Some of the tiles in the bathroom were damaged at the time Loretta purchased the apartment. She paid a tiler $1,200 to replace the bathroom floor tiles prior to tenants moving into the apartment on 15 July 2022. f) A new intercom and security camera were installed in the apartment at a cost of $280 on 1 August 2022. g) The laundry tub leaked water into linen (storage) cupboards. A segment of the cupboard was replaced due to water damage at a cost of $700 on 1 February 2023. h) Landlord insurance for the apartment was paid on 1 July 2022 and totalled $1,200. i) Loretta purchased a new hot water system for the apartment on 1 March 2023 costing $1,300. j) Brisbane City Council rates were paid each quarter, totalling $2,400 for the year ended 30 June 2023. k) Loretta paid $550 in legal fees in April 2023 for advice on the lease terms when the tenants did not pay rent for two months. l) Loretta travelled 200 kilometres in her car during the income year to inspect her rental property.

You can assume that any depreciating assets have an effective life of 10 years and that Loretta use the prime cost method of depreciation when relevant.