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If the IRS audits your caregiver deduction, you will need to prove that you paid it (bank records), and what type of service you paid for (invoices). The IRS can also ask for a doctor's letter explaining that your wife has cognitive impairment, or that she is unable to perform 2 activities of daily living (eating, toileting, transferring, bathing, dressing and continence). You can record the deduction with your medical expenses. The IRS does not allow a deduction for all of your medical expenses. In your situation, it sounds like the first $1,000 - $20,000 is not deductible. There is also a chance that additional deductions won't benefit you. You can set up a consultation at taxgeek.timetap.com; the consultation is FREE if you bring in the last 2 or 3 years' worth of tax documents We can calculate an estimated benefit for the deduction & help you find other deductions & credits that you might have been missing.

Starting in 2018 federal deductions for casualty losses are usually only allowed if the Disaster Area is Federally Declared. The Correct form is 4684. Here's an article that you might find useful: https://www.thebalance.com/casualty-and-theft-losses-3193002

There is a $15,000 annual exclusion for reporting gifts that you give people, but the only way to get a deduction is to pay them from your business for work that they do instead of giving them a gift. Recipients report income they receive on their taxes, but not gifts.

If you think that you might get a 1099-C, then you should acknowledge the discharged debt on your tax return; there are ways to list it on your tax return as non-taxable. If you get a 1099, then that income (or discharged debt) was reported to the IRS, & failure to acknowledge it would usually trigger an audit.