Tax Software AP $4-2$

This problem is continued in Chapter $11$ with Tax Software AP $11-2($Chapter $11$ is in Volume $2).$

DISCLAIMER: All characters appearing in this problem are fictitious. Any resemblance to real persons, living or dead, is plarely coincidental.

George Pharmacy is a pharmaceutical sales rep who has been very successful at his job in the last few years. Unfortunately, his family life has not been very happy. Three years ago, his only child, Anna, was out for a drive when she was hit by a drunk driver. She and her husband were killed and their $14-$year$-$old son, Kevin, was blinded in the accident. He also suffered extensive injuries to his jaw that have required major and prolonged dental work.

CHAPTER $4$: Taxable Income and Tax Payable for Individuals

George and his wife, Valerie, adopted Kevin. Valerie quit her part$-$time job to care for him. She also cares for her mother, Joan Drugstore, who lives with them. Joan suffers from dementia, Parkinson's, and severe depression. The family doctor has signed a letter stating that she is dependent on George and Valerie because of her impairments. Joan does not meet the residency requirements necessary to qualify for OAS.

Valerie's parents separated two years ago in Scotland after her father, David Drugstore, suffered enormous losses in the stock market. They were forced to sell their home and David moved to Chile. David phones periodically to request that money be deposited in his online bank account.

George's brother, Martin, completed an alcohol rehabilitation program after his drinking caused significant problems in his life. He is also living with George and Valerie while he is enrolled as a full$-$time student at Western University. George is paying his tuition, and Martin has agreed to transfer any available education$-$related tax credit to George. Although Martin plans to file his $2022$ income tax return, he has not done so yet.

Kevin is taking several undergraduate psychology courses at Western University. After hearing a talk given by an expert blind echolocator $($a person who uses sound to locate objects$),$ his goal is to become a researcher at the Brain and Mind Institute and study the use of echolocation. Kevin has agreed to transfer the maximum tuition credit to George.

Other information concerning

CHAPTER $4$: Taxable Income and Tax Payable for Individuals

Required: With the objective of minimizing George's income tax payable, prepare his $2022$ income tax return using the ProFile tax software program assuming Valerie does not file an income tax return.

List any assumptions you have made and any notes and tax planning issues you feel should be placed in the file. Ignore any GST$/$HST & PST implications in your solution by assuming that George does not qualify for the GST$/$HST rebate. Also determine George's $2023$ RRSP deduction limit on the assumption that there are no unused RRSP deduction room available at the end of $2021$ and no undeducted RRSP contributions. Note that while RRSP deductions are covered in Chapter $10,$ the ProFile software will automatically prepare the RRSP deduction limit for $2023$ on form "RRSPLimit."

$\backslash$table$[[$Personal Information,Taxpayer$],[$Title$,$Mr$.],[$First Name,George$],[$Last Name,Pharmacy$],[$SIN$,527-000-509$George for $2022$ is provided on the following pages.