Problem: Daniel owns his own toy store, Toy Warehouse. He uses a registered tax agent to assist in the preparation of the financial statements and income tax affairs of the business.
Daniel provides you with a summary of various items charged to him by his tax agent during the 2022 income year:
| preparation of the 2021 financial statements of Toy Warehouse |
$2,600 |
| preparation of the 2021 income tax return of Toy Warehouse |
$620 |
| provision of capital gains tax advice |
$340 |
| tax penalty imposed by the ATO for lodging his 2021 tax return late |
$230 |
| general interest charge (GIC) imposed by the ATO for late payment |
$32 |
| attendance at a tax audit by the tax agent involving a dispute with the ATO |
$1,600 |
What amount is deductible to Daniel under Section 25-5 of the ITAA (1997)?