Acc303 taxation law assignment question microhard is a, Taxation

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Acc303 taxation law assignment question microhard is a

Taxation Law Assignment Question:

Microhard is a computer software company. Its principal product was a database programme called Xshell.

Microhard decided to expand its products to include a word processing programme that it released under the brand name 'WurdPherfect'.

Soon after the release a competitor [Courelle] sued Microhard for breach of copyright, claiming the name was copied from Courelle's software package. Microhard incurred $500,000 in legal fees and eventually settled the matter on payment of $4m damages.

Required: Advise Microhard whether the outgoings are deductible.

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