Larry Stupida Was Involved in Heroin Dealing and After Being

Larry Stupida was involved in heroin dealing and after being arrested and convicted of his criminal activity and as a tax return was being prepared by the ATO on his behalf, he claimed that he was robbed by one of his 'associates' of an amount of $10,000 during the year ended 30 June 2020. Which one of the following statements is correct regarding Larry Stupida?

A) He cannot claim any deduction for his 'business losses' as he is involved in a criminal activity
B) He can claim a deduction in full for his business losses as they are 'necessarily incurred' in carrying on a business
C) He can claim a deduction in full for his business losses as they are 'incidental and relevant' to his income earning activities as a drug dealer
D) Larry would need a witness to be able to prove his loss and if he could obtain a witness statement confirming his loss, then he would be entitled to claim a deduction for his loss of $10,000