Personal Tax Assignment Problem:George Pharmacy is a pharmaceutical salesman who has been very successful at his jobin the last few years. Unfortunately, his family life has not been very happy. Three yearsago, his only child, Anna, was driving a car that was hit by a drunk driver. She and herhusband were killed and their 13 year old son, Kevin, was blinded in the accident. He alsosuffered 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 suffersfrom dementia, Parkinson's and severe depression. The family doctor has signed a letterstating that she is dependent on George and Valerie because of her impairments. Joandoes not meet the residency requirements necessary to qualify for Canadian Old AgeSecurity payments.Valeries 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 andDavid moved to Chile. David phones periodically to request that money be deposited inhis on-line bank account.Georges brother, Martin, completed an alcohol rehabilitation program after being firedfor drinking on the job. He is also living with George and Valerie while he is enrolled as a fulltime student at Western University. George is paying his tuition and Martin has agreed totransfer any available education related amounts to George. Although Martin plans to filehis 2015 tax return, he has not done so yet.In addition to Georges salary, he also earns commissions. His employer requires him tohave an office in his home and has signed the form T2200 each year to this effect.Other information concerning George for 2015 is given on the following pages.Required: Prepare the 2015 income tax return of George Pharmacy using the CANTAXtax software program assuming Valerie does not file a tax return so he is not eligible toclaim the Family Tax Cut. (Answer No to the question "Are you eligible to claim the FamilyTax Cut" on S1A.). List any assumptions you have made, and any notes and tax planningissues you feel should be placed in the file. Ignore HST implications in your solution byassuming that George does not qualify for the GST/HST rebate.Title Mr.First Name GeorgeLast Name PharmacySIN 527-000-509Date of birth (Y/M/D) 1951-07-02Marital Status MarriedCanadian citizen? YesProvide information to Elections Canada? YesOwn foreign property of more than $100,000 Canadian? NoFirst Name Valerie Kevin JoanLast Name Pharmacy Pharmacy DrugstoreSIN 527-000-483 527-000-517 NoneDate of birth (Y/M/D) 1950-12-30 1999-10-17 1930-02-24Net income $6,520* Nil $500*$5,800 in CPP and $720 in UCCBFirst Name David MartinLast Name Drugstore PharmacySIN None 527-000-533Date of birth (Y/M/D) 1931-01-12 1968-06-02Net income Nil $8,300For 2015, George received two children's fitness tax receipts, one from a swim club for$300 and one from a summer day camp for $900. He also received a children's arts taxreceipt of$250 for a course at a local theatre school.During September, David was arrested in Chile. Valerie had to spend three weeks in Chileand $2,000 in bribes before she could get him released from jail. George had to payNannies on Call $3,500 for in-home help to take care of Kevin while she was gone.Tuition fees - for Martin Pharmacy (brother) A 6,000Number of months in school - part-time B 0Number of months in school - full-time C 8Issuer - Mega Pharma Inc.Employment income 14 378,000.00Employees CPP contributions 16 2,479.95Employees EI premiums 18 930.60Income tax deducted 22 114,000.00Employment commissions 42 82,000.00Charitable donations 46 400.00During 2015, Mega reimbursed George $3,788 for meals and entertainment withclients,$2,268 for hotels and $4,925 for airline tickets.They made the following donations:Valerie Mothers Against Drunk Drivers (MADD) 1,000George Canadian Institute For The Blind (CNIB) 3,000George is not eligible for the first time super donor tax credit.George paid the following medical expenses for his family:2015-12-31 George Johnson Inc. Out of Canada insurance 731.002015-08-31 George Dr. Smith Dental fees 155.402015-09-19 George Optician Prescription glasses 109.002015-11-07 Valerie Pharmacy Prescription 66.842015-06-07 Joan Dr. Wong Psychiatric counseling 2,050.002015-03-22 David Tropical DiseaseCentre Prescription 390.002015-12-20 Martin Dr. Walker Group therapy 6,000.002015-10-01 Kevin Dr. Takarabe Orthodontics and Dental 30,000.00George paid $800 for the care and feeding of Kevins Seeing Eye dog, Isis, during 2015.George is required to have a home office by his employer. He provided the following detailsregarding his home office expenses.Area of home used for home office (square feet) 650Total area of home (square feet) 5,000Telephone line including high speed internet connection 620Hydro 3,200Insurance - House 4,000Maintenance and repairs 3,800Mortgage interest 6,200Mortgage life insurance premiums 400Property taxes 6,700During 2015, George purchased a new computer and software that will be used solely inhis home office for employment related uses. The computer cost $3,600 and the varioussoftware programs cost $1,250.At the beginning of 2015, George had a net capital loss carry forward of $10,500 from thesale of shares in 2014. He had not disposed of any capital assets prior to 2014. He soldthe following assets in 2015:Description Molson Inc. shares Imperial Oilshares SailboatNumber of units 150 387 N/AYear of acquisition 2012 2013 2013Date of disposition February 14 June 6 October 1Proceeds of disposition 37,000 9,600 74,000Adjusted cost base 27,600 12,100 72,000Outlays and expenses 35 29 N/ADescription Motorcycle Painting Coin collectionYear of acquisition 2015 2008 2012Date of disposition November 17 August 28 March 24Proceeds of disposition 14,000 1,100 700Adjusted cost base 21,000 450 1,800Outlays and expenses N/A N/A N/AGeorge had rental property and provided the following information related to it:Address - 888 YYZ Drive, Toronto, Ontario M0M 0M0Year of purchase 2011Gross rents 16,000Property taxes 5,128Insurance 1,890Interest on mortgage 3,175Payment on principal 2,200Furnace repairs 550Maintenance contract 3,469Building purchased for $120,100 - UCC beginning of year 107,441Fixtures purchased for $8,500 - UCC beginning of year 4,651The building and fixtures were purchased on August 28, 2011. At the time the buildingand fixtures were being used as a drugstore and Mr. Pharmacy has retained the sametenant.Required: Prepare Mr. Pharmacys 2015 income tax return using the CANTAX taxsoftware program assuming Natasha does not file a tax return so he is not eligible to claimthe Family Tax Cut. (Answer No to the question "Are you eligible to claim the Family TaxCut" on S1A.). List any assumptions you have made, and any notes and tax planningissues you feel should be placed in the file.