1. Is Malik having to show his foreign residential income from Bangladesh when he was studying as an international student or does he has to show his foreign income as Bangladesh has peace treaty with Australia so does he has to pay tax for the rental income when he is an international student if not does it has to be included in 2021 now that he is an permanent resident. 2. Will Malik's activities be considered as hobby if so give your explanation for both for and against if it is considered as a hobby or not In 2019, he did not report any profit from his computer repair activity because he considered this to be a hobby. Advise Malik, by reference to tax cases, legislation and or rulings whether this is correct. In your answer you should discuss at what point if any this becomes a business. 3. Advise Tax payable for each year. Answer should discuss the tax effect of the bitcoin mining and sales. Malik arrived in Australia on a student visa in 2018 and completed a three-year IT Degree at WSU. In 2021 Malik became a permanent resident visa holder. Due to the pandemic, Malik has never returned to Bangladesh. Each year since he arrived in Australia, he earnt AU$15,000 from rent on rental properties owned by him in Bangladesh. While he studied, Malik worked at Hungry Jacks. Earning $15,000 per annum. Malik liked working on computers and in 2019, began repairing computers in his spare time at home. He did this mostly for friends and fellow students. At first, he just charged people for parts, but then he began charging people $20 for each hour he worked. In 2019 he earnt $3,500 above costs? from this activity. In 2020 he became so busy repairing computer; that he quit his job at Hungry Jacks. In that year, Malik also began assembling and selling custom gaming computers. He stored dozens of computers in his spare room. He earnt $35,000 above cost, from fixing and selling computer from his home. In 2021, he modified six of the computers for bitcoin mining. He made $50,000 from computer repairs and sales; and successfully mined 3.251 bitcoins valued at about $52,000 each. He sold .5 bitcoin for $26,000 in Jan 2021 to pay his electricity bill of $15,000 and to buy more mining computers. His neighbours are not happy about the noise of the computers, and he is thinking of leasing a small factory unit.

In July 2021 Malik came to you and explained that:

He had not lodged his 2020 or 2021 tax returns. Advise him on his tax payable for each year. Your answer should discuss the tax effect of the bitcoin mining and sales and use IRAC to answer your question.

Answer rating: 100% (QA)

Few of us want to pay more tax Understanding the tax credits and deductions that were eligible for and calculating them correctly can mean the difference between owing more money at tax time or receiv... View the full answer