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Tax Software AP 1 1 - 2 This problem is an expansion of the Chapter 4 problem. DISCLAIMER: All characters appearing in this problem are
Tax Software AP
This problem is an expansion of the Chapter problem.
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
yearold 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 parttime job to care for him. She also
cares for her mother, Joan Drugstore, who lives with them. Joan suffers from dementia, Parkin
son'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 require
ments 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 after his drinking
caused significant problems in his life. 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 to
transfer any available educationrelated amounts to George. Although Martin plans to file his
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 echoloca
tion. Kevin has agreed to transfer the maximum tuition credit to George.
Other information concerning George for is provided on the following pages.
Required: Prepare the income tax return of George Pharmacy 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 GSTHST implications in your solution by assuming that George does not qualify for the
GSTHST rebate.
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