In the current tax year, Janie and Jack Forrester come to your office to discuss their tax return. For the past year Jack's mother, Eugenie Forrester, has been living with them. She is 75 years old and in an advanced stage of dementia. Eugenie requires substantial care and has nurses who come to care for her in their home daily while the Forresters go to work. Eugenie's only source of income is $5,000 she receives annually from Social Security. Jack estimates that her medical expenses total around $15,000 in excess of the amounts covered by Medicare. Her personal care expenses, food, and lodging total around $10,000 per year. Jack and his two siblings share all of Eugenie's expenses equally. In addition, his siblings assist in caring for Eugenie to the extent possible.

Janie and Jack would like to know if they can claim Eugenie as a dependent on their tax return. They believe doing so would help them greatly as they may utilize medical expense deductions and possibly credits which would substantially reduce their income tax liability and offset the costs of Eugenie's care.