Tax Software AP 4-2 This problem is continued in Chapter 11. DISCLAIMER: All characters appearing in this problem are fictitious. Any resemblance to real persons, living or dead, is purely 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 driving a car that 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. 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 resi- dency requirements necessary to qualify for Canadian OAS payments. Valerie's parents separated two years ago in Scotland after her father, David Drugstore, suf- fered 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 being fired for drink- ing on the job. 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 amounts to George. Although Martin plans to file his 2020 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 George for 2020 is provided on the following pages. Required: With the objective of minimizing George's tax payable, prepare the 2020 income tax return of George Pharmacy using the Profile tax software program assuming Valerie does not file a tax return. List any assumptions you have made and any notes and tax planning issues you feel should be placed in the file. Ignore HST implications in your solution by assuming that George does not qualify for the GST/HST rebate.Personal Information Taxpayer Title Mr First Name George Last Name Pharmacy SIN 527-000-509 Date of Birth (Y/M/D) 1956-07-02 Marital Status Married Canadian Citizen? Yes Provide Information to Elections Canada? Yes Own Foreign Property of More than $100,000 Canadian? No Taxpayer's Address 123 ZZZ Street, London, Ontario, NOZ OZO Phone number (519) 111-1111 Family Members Spouse Child Mother-in-law First Name Valerie Kevin Joan Last Name Pharmacy Pharmacy Drugstore SIN 527-000-483 527-000-517 None Date of Birth (Y/M/D) 1955-12-30 2004-10-17 1935-02-24 Net income $6,520 in CPP Nil $500 Family Members Father-in-Law Brother First Name David Martin Last Name Drugstore Pharmacy SIN None 527-000-533 Date of Birth (Y/M/D) 1936-01-12 1973-06-02 Net income Nil $8,300 During September, David was arrested in Chile. Valerie had to spend three weeks in Chile and pay $2,000 in bribes before she could get him released from jail. George had to pay Nannies On Call $3,500 for in-home help to take care of Kevin while she was gone. T2202A (Martin) Box Amount Tuition fees for Martin Pharmacy (brother) A 8,000 Number of months in school-part time B 0 Number of months in school-full time C 8 T2202A (Kevin) Box Amount Tuition fees for Kevin A 3,600 Number of months in school-part time B 8 Number of months in school-full time C 0Donor Charitable Donation Receipts Am't Valerie Mothers Against Drunk Drivers (MADD) 1,000 George Canadian Institute for the Blind (CNIB) 3,000 T4 Box Amount Issuer-Mega Pharma Inc. Employment income 14 378,000.00 Employee's CPP contributions 16 2,898.00 Employee's El premiums 18 856.36 Income tax deducted 22 114,000.00 Employment commissions 42 82,000.00 Charitable donations 46 400.00 During 2020, Mega reimbursed George $3,788 for meals and entertainment with clients, $2,268 for hotels, and $4,925 for airline tickets. In addition to George's salary, he also earns commissions. His employer requires him to have an office in his home and has signed the form T2200 each year to this effect. On October 1, 2020, George purchased a new computer and software that will be used solely in his home office for employment-related uses. The computer cost $3,600 and the various soft- ware programs cost $1,250. House Costs Area of home used for home office (square feet) 650 Total area of home (square feet) 5,000 Telephone line including high speed internet connection 620 Hydro 3,200 Insurance-House 4,000 Maintenance and repairs 3,800 Mortgage interest 6,200 Mortgage life insurance premiums 400 Property taxes 6,700 (Y/M/D) Patient Medical Expenses Description Am't 2020-12-31 George Johnson Inc. Out of Canada insurance 731.00 2020-08-31 George Dr. Smith Dental fees 155.40 2020-09-19 George Optician Prescription glasses 109.00 2020-11-07 Valerie Pharmacy Prescription 66.84 2020-06-07 Joan Dr. Wong Psychiatric counselling 2,050.00 2020-03-22 David Tropical Disease Centre Prescription 390.00 2020-12-20 Martin Dr. Walker Group therapy 6,000.00 2019-10-01 Kevin Dr. Takarabe Orthodontics and dental 30,000.00George paid $800 for the care and feeding of Kevin's seeing eye dog, Isis, during 2020. George's 2020 RRSP deduction limit is $285,550