QUESTION: 3 Marty resigned from his salaried job to go into business to operate a coffee shop. On 1 July 2018 Marty borrowed $800,000 from a bank at an interest rate of 8% per annum. The loan is repayable over 10 years. Marty used $600,000 of the borrowings to purchase the goodwill and equipment of his new business. This coffee shop business was purchased the same day on 1 July 2018. Marty then loaned the remaining $200,000 to his wife, Deb, at an interest rate of 2% per annum. Deb used this $200,000 to renovate a holiday home that she owns (and that is not used to derive any rent). Unfortunately, after 12 months, Marty was forced to close the coffee shop due to low sales. The building and equipment were sold eventually to a buyer but a loss was made on the sale and as a result interest continued to be paid on the balance of the loan. Marty informs you that the total interest paid on the loan for the financial year ended 30 June 2019 was $64,000. Required: Advise Marty as to what, if any, tax deductions he may be entitled to claim for the year ended 30 June 2019. Would Marty be able to continue to claim any interest for any tax years after 30 June 2019 (do not try and work out what his claims may be for these later years)? Support your answer with legislative and case authority.