"A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote:
- quote -

This answers my question. Thanks very much (and thanks to
Nan Eklund for her example).

Two factors were confusing me: 1) we never received a
1099-LTC, and 2) F8853/SecC seemed to only be relevant when
the payments received exceed the $220/day or exceeded the
actual daily costs. I didn't see anything in F8853/C that
said to reduce the Sch-A medical expenses by the payments
received, and that just didn't seem right.

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Vic Dura wrote:

- quote -

The plan owner will receive a Form 1099-LTC that will
reflect the gross amount paid. Box 3 is the important box as
it tells you whether this is a per diem type plan or a
reimbursement type plan. If it is a reimbursement, then
there is no income to declare nor is there any medical
deduction allowed for any amount that was reimbursed.

Assuming we are dealing with a qualified contract:

If it is a per diem plan and the amount paid is equal to or
less than the greater of actual expenditures or $220 per day
(2003 amount) for the covered period then there is no income
nor is there a deduction for any amount reimbursed. If the
per diem payment exceeds the amounts in the previous
sentence, then see IRS Form 8853 Section C and its
instructions for computing taxable income. See that form
anyhow, as it has to be completed if this was a per diem
plan or a plan that paid on a periodic basis (i.e., not a
reimbursement plan).

--
Alan
http://taxtopics.net

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