Question:
Ethel Mertz (Fred's widow) and Lucy have always been as close as sisters although they are not related in any way by blood. To be honest, Ricky feels that she spends far too much time in their home since Fred died. Against his better judgement, Ricky has agreed to let Ethel (who is in her late 60s and does not work) move in with them permanently. His hope is that keeping busy with Ethel will keep Lucy out of trouble. He also thinks that Ethel is going to cost him a small fortune since Ethel eats a lot... at least, that's what Fred always told him. Once Ethel moves in, may the Ricardos claim her as a dependent on their joint return? If so, when? What are the requirements for claiming someone, such as Ethel, as a dependent? How, if at all, will Ethel's move in affect the Ricardo's tax return filing status and/or income tax liability? Ricky figures that since he is going to support Ethel, he ought to get a tax break.