What constitutes “taking advantage” of someone who’s basically mentally impaired?

More detail is needed. Do you mean monetarily or otherwise?

In all circumstances especially with people suffering dimentia.

I took the liberty of replacing your phrase "taking advantage" with abuse, since that can be a very broad statement. As the State Bar of California defines it, abuse is "the neglect, exploitation or 'painful or harmful' mistreatment of anyone. It can involve physical violence, psychological abuse, isolation, abandonment, abduction, false imprisonment or a caregiver’s neglect. It could also involve the unlawful taking of a person’s money or property. In short, abuse involves various crimes, such as theft, assault or identity theft, that strike victims of all ages" [and abilities]. To clarify, this can also be perpetrated by people who are health surrogates, power of attorney (POA), caregivers or perfect strangers. The fact that someone is "mentally impaired" is irrelevant. If you would consider an unimpaired person as being "taken" it's a pretty safe bet that the same would apply to one who is impaired. The only difference is that someone who is impaired will be unable to perceive deception. Thus, making them more prone to it. The system tries to protect such people when they are declared incompetent by assigning professional POA's to protect them. If you are concerned about someone who is potentially being taken advantage of, you should contact a district attorney or local police.