I and my wife have been caring for my brother-in-law at our home for all of 2020 as we are close to the Mayo Clinic hospital where he is being treated. He has a terminal illness and has been on a gradual decline requiring more and more support throughout the year. In July of 2020, after 8 months of caring for him, it became obvious that he would not be able to go back to his home and given the pandemic, placing him in a facility did not seem reasonable.
We talked with my brother-in-law (as best we could) and his step-son (POA) and began receiving a personal check from my brother-in-law's checking account that month ($2,580/month starting in July). The amount of this check was equal to his net monthly social security check and is being provided to offset expenses for his daily living and required care-giving.
I'm not certain if I need to treat this as income or if this should be washed against the expenses incurred?
I'm also wondering if I (should/should not) claim him as a dependent?
Given that we have been home caring for him for the past year and another portion of our income related to our real estate business has not generated a significant amount of income in this past year.
This has been an unanticipated situation that just seemed to evolve. I'm looking to get an idea of the proper way to handle this situation.
Any advice is greatly appreciated.
