Question 4 (10 marks) Amity was looking for a life style change. She tired of the city life and decided she would like to develop an accommodation business in the Adelaide Hills. So she sold her catering business three years ago and found the perfect tract of land for sale. She investigated the zoning requirements and was advised by the council zoning should not be an issue. As a result she entered into contract to purchase the land for $3m and paid a deposit and two instalments whilst interest accrues on the unpaid amount. He also bought some cattle and alpacas to run on the land. She intended to sell alpaca wool and occasionally sell a couple of the animals. The animals would all be sold once development was underway. She engaged a team of architects and developers to plan the development and when the plans are drawn up she applied to the council for zoning permits. The council refused the request. 2 years ago following discussions with the council a further modified proposal was submitted to council who approved in principle. Amity decided to bring in a partner and 18 months ago sold a quarter of her interest to Archie. During all of this time horses had been agisted on the land, and along with small amounts from cattle and alpaca sales, this was the only income earned. However, Amity and Archie had a disagreement over the development and in disgust Amity sold her interest. Required With reference to applicable legislation and case law determine whether Amity is entitled to claim the interest on the loan as a deduction over the three year period?