Ying is an elite athlete, having represented Australia in gymnastics at the last two Olympics.

Ying wants to commence a business importing gym equipment from overseas.

First, she

had to negotiate with the manufacturers to obtain stock for her business.

In May 2018, she

paid Hank, an import/export agent located in the US, a fee of $80,000 to help her negotiate

agreements with manufacturers located in the US.

The fee was 30% higher than the

standard fee payable for the type of work Hank did in the US.

Hank is her brother.

Ying then entered into an agreement with FitnessMe, a manufacturer located in New York, to

be the Australian distributor of the FitnessMe brand of gym equipment, in return for a

payment of $1.2m.

On 30 June 2018, she signed the contract with FitnessMe.

The payment

was made on 5 July 2018.

Ying made her first sales of gym equipment in mid-August 2018.

Required

:

Using relevant legislation and case law, explain to Ying whether the above outgoings are

deductible under section 8-1 of the ITAA 1997, and in what income yea