RR Pty Ltd borrows money to buy land and build a motel.

Is the company entitled to a deduction for interest if it:

(a) continues to own and operate the motel;

(b) sells the land and buildings on a sale/lease back arrangement and then operates

the motel; and

(c) sells the land and buildings and severs its relationship with the venture?

You should support your answers by referring to the following Taxation Law Cases: Texas Co (Australasia) Ltd v FCT (1940), Steele v DCT (1997), Amalgamated Zinc (de Bavays) Ltd v FCT (1935), FCT v Riverside Road Pty Ltd (in liq) (1990) and AGC (Advances) Ltd v FCT (1975)