I've been looking and cannot find this situation, however I know it must exist.
My Mother who has dementia has moved from Assisted Living where she was unhappy to my brother's home. He has his own small struggling home improvement business. His wife would help him paint, etc for customers, but now she is full-time caregiver to my mother. As the POA for my mother, I pay her $2000 per month thru my Mom's savings account. Here are some facts:
The home belongs to my Brother and his wife, not my Mother.
They do not pay for my Mothers prescriptions or medical expenses of any kind.
They do not provide clothing or diapers (depends) for my Mother.
They do provide meals, laundry, medication dispensing, a home environment, etc.
As POA, I will need to provide a 1099 to my sister-in-law at the end of the year.
Now for my questions:
What kind of 1099, a 1099 MISC or something else?
Do they need to pay self employment taxes on this money?
What kind of deductions can they take to cut this tax burden?
I assure you that they are not making any or much money for the amount of work and time that is required to care for my Mom.