Reference no: EM132713552
George Pharmacy is a pharmaceutical salesman 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 residency requirements necessary to qualify for Canadian Old Age Security payments.
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 2020 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, his goal is to become a researcher at the Brain and Mind Institute and study the use of echolocation.
Other information concerning George for 2020 is given on the following pages.
During September, David was arrested in Chile. Valerie had to spend three weeks in Chile and $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.
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.
During 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 software programs cost $1,250.
George 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.
Required: Prepare the 2020 income tax return of George Pharmacy using the CANTAX 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.
Attachment:- Tax Case.rar