George Pharmacy is a pharmaceutical salesman who has been very successfulat 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, J

George Pharmacy is a pharmaceutical salesman who has been very successfulat 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 residency requirements necessary to qualify for Canadian Old Age Security payments. Assume that Valerie does not file a tax return.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 on-line bank account.George’s brother, Martin, completed an alcohol rehabilitation program after being fired for drinking 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 2019 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, i.e., one 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.            Tax Software Assignment ProblemsOther information concerning George for 2019 is given on the following pages.Required: Prepare the 2019 income tax return of George Pharmacy using the ProFile tax software program, any other tax software or manually using the forms posted in the content section of DC Connect. 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. Title Mr. First Name George Last Name Pharmacy SIN 527-000-509 Date of birth (Y/M/D) 1955-07-02 Marital Status Married Canadian citizen? Yes Provide information to Elections Canada? Yes Own foreign property of more than $100,000 Canadian? No First Name Valerie Kevin Joan Last Name Pharmacy Pharmacy Drugstore SIN 527-000-483 527-000-517 None Date of birth (Y/M/D) 1954-12-30 2003-10-17 1934-02-24 Net income $6,520 in CPP Nil $500                                                            Tax Software Assignment Problems First Name David Martin Last Name Drugstore Pharmacy SIN None 527-000-533 Date of birth (Y/M/D) 1935-01-12 1972-06-02 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. 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 Tuition fees – for Kevin A 3,600 Number of months in school – part-time B 8 Number of months in school – full-time C 0 Valerie Mothers Against Drunk Drivers (MADD) 1,000 George Canadian Institute For The Blind (CNIB) 3,000 Issuer – Mega Pharma Inc. Employment income 14 378,000.00 Employee’s CPP contributions 16 2,748.90 Employee’s EI premiums 18 860.22 Income tax deducted 22 114,000.00 Employment commissions 42 82,000.00 Charitable donations 46 400.00 During 2019, 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.            Tax Software Assignment Problems 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 2019-12-31 George Johnson Inc. Out of Canada insurance 731.00 2019-08-31 George Dr. Smith Dental fees 155.40 2019-09-19 George Optician Prescription glasses 109.00 2019-11-07 Valerie Pharmacy Prescription 66.84 2019-06-07 Joan Dr. Wong Psychiatric counseling 2,050.00 2019-03-22 David Tropical Disease Centre Prescription 390.00 2019-12-20 Martin Dr. Walker Group therapy 6,000.00 2019-10-01 Kevin Dr. Takarabe Orthodontics and Dental 30,000.00 George paid $800 for the care and feeding of Kevin’s seeing eye dog, Isis, during 2019.On October 1, 2019, 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 software programs cost $1,250.At the beginning of 2019, George had a net capital loss carry forward of $10,500 from the sale of shares in 2018. He had not disposed of any capital assets prior to 2018. Description Molson Inc. shares Imperial Oil shares Sailboat Number of units 150 387 N/A Year of acquisition 2016 2017 2017 Date of disposition February 14 June 6 October 1 Proceeds of disposition 37,000 9,600 74,000 Adjusted cost base 27,600 12,100 72,000 Outlays and expenses 35 29 N/A Description Motorcycle Painting Coin collection Year of acquisition 2019 2012 2016 Date of disposition November 17 August 28 March 24 Proceeds of disposition 14,000 1,100 700 Adjusted cost base 21,000 450 1,800 Outlays and expenses N/A N/A N/A                                                            Tax Software Assignment Problems Address – 888 YYZ Drive, Toronto, Ontario M0M 0M0 Year of purchase 2015 Gross rents 16,000 Property taxes 5,128 Insurance 1,890 Interest on mortgage 3,175 Payment on principal 2,200 Furnace repairs 550 Maintenance contract 3,469 Building purchased for $120,100 – UCC beginning of year 107,441 Fixtures purchased for $8,500 – UCC beginning of year 4,651 The building and fixtures were purchased on August 28, 2015. At the time the building and fixtures were being used as a drugstore and Mr. Pharmacy has retained the same tenant.George knows he should have been contributing to various savings plans over the years, but his increasing number of needy dependants required he spend all of his take home pay to support them and he has contributed to none. It was only in 2019 that his compensation had increased enough so that he had sufficient funds to consider savings plans.His daughter had made contributions totalling more than $10,000 to an RESP for Kevin prior to her death, but George has made no RESP contributions to the plan since then. George’s 2019 RRSP deduction limit is $285,550.BusinessAccountingShare