You may claim your parent as a dependent if the following tests are met:

See Publication 17, Your Federal Income Tax, and Table 3-1 on page 27, "Overview of teh Rules for Claiming an exemption for a Dependent," for additional information about claiming a dependent, see also, Publication 501, Exemptions, Standard Deduction, and Filing Information.

 

 

 

You may file as head of household if you meet the following requirements.

1. You are unmarried or “considered unmarried” on the last day of the year.
2. You may claim a dependency exemption for your parent.
3. You paid more than half the cost of keeping up a home for your parent for the tax year.
Your dependent parent does not have to live with you. See Special rule for parent , in Publication 17, under Qualifying Person. 
See Table 3-1 in publication 17 on page 27,  “Overview of the Rules for Claiming an Exemption for a Dependent,” for additional requirements. See Table 2-1 on page 25, “Who Is a Qualifying Person Qualifying You to File as Head of  Household?” See also Publication 501, Exemptions, Standard Deduction, and Filing Information.

Yes, but only if your parent was your dependent at the time the medical services were provided or at the time you paid the expense. Also, the amount of the allowable medical expense is the cost of the modification decreased by any resulting increase to the value of your home. Finally, your total deduction for medical and dental expenses must be reduced by 7.5 percent of your adjusted gross income. See Publications 17 and 502 for additional information.

An amount of money that your parents give you to offset their expenses is not taxable to you, however, you should take this amount into account in determining whether your parents are your dependents.

See Publication 501,  Exemptions, Standard Deduction, and Filing Information

If you can claim your parent as a dependent, you also may be able to claim a deduction for the portion of your parent’s medical or dental expenses that you paid. However, your total deduction for medical and dental expenses must be reduced by 7.5 percent of your adjusted gross income. See Publication 17, pages 140-144, for additional information. See also Publication 501, Exemptions, Standard Deduction, and Filing Information; Publication 502, Medical and Dental Expenses Including the Health Coverage Tax Credit.

Yes, this transaction will be considered a sale of their home. The property was transferred for services.
See Publication 523 “Selling your Home” for additional information.

Your parent’s social security benefits are not taxable to you.  However, in determining whether your parent is your dependent, you should consider the benefits used for your parent’s support as support provided by your parent.   

See Publication 501, Exemptions, Standard Deduction, and Filing Information, for additional information.

Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. However, interest income received as a result of life insurance proceeds may be taxable.

See Publication 525 for additional information.

Yes. If certain conditions apply, this transaction would be considered a taxable gift from your parent to you.

Generally, your parent must file a gift tax return ( Form 709) if any of the following apply:
• Your parent gave gifts to at least one person (other than his/her spouse) that are more than the annual exclusion for the year. For 2010, the annual exclusion is $13,000.
• Your parent and his/her spouse are splitting a gift.
• Your parent gave someone (other than his/her spouse) a gift of a future interest that he or she cannot actually possess, enjoy, or receive income from until some time in the future.
• Your parent gave his/her spouse an interest in property that will be ended by some future event
NOTE: If any of the above conditions apply, your parent is required to file a Form 709, even if a gift tax is not payable.
See Publication 950   for additional information on gifts.