Working Caregiver- Claiming an Elder on Taxes

Texas Elder Dependent on Tax Claim

We've been caring for grandmother for several years. For the last 4 months, we've been paying her expenses out of our pocket.  We have the question and have received conflicting information regarding whether we can deduct and claim Grandma as a dependent because of her income.  IRS Publications 15 and 501 don't help much on this question.  We were hoping that some well-experienced source connected with the profession might be able to provide a definite answer for us. 

A CPA states:  Under the circumstances described here, the expenses would not be deductible by the family. Be cautioned to keep in mind that if you are paying her expenses that is technically "gifting" and to keep an eye on the limitations on gifting if the family estate might be affected (typically this will only come into play with a sizeable estate and if the expense money you are "gifting" is substantial).  We think your best advice here would come from your CPA.  "CPAs must now have at least 30 hours of undergraduate level accounting courses on certain kinds of financial products and services to senior citizens". 

Be aware that looking for guidance from the IRS - there might be some strategies that could help you - but they aren't in the business of helping us try to find ways to maximize our tax efficiency - they are just there to police.