Question: Speculative Pty Ltd borrows $400 000 to purchase a block of flats for the purpose of renting them out. However, prior to tenanting the flats

Speculative Pty Ltd borrows $400 000 to purchase a block of flats for the purpose of renting them out. However, prior to tenanting the flats Speculative goes into liquidation and the property is sold for the purchase price. Is Speculative entitled to deductions for interest paid on the loan as no rent was ever received? Would your answer differ if Speculative was in the business of building blocks of flats?

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