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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6723
Experience:  Extensive Experience with Tax, Financial & Estate Issues
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My wife is in a skilled nursing facility. We pay out-of-pocke

Customer Question

My wife is in a skilled nursing facility. We pay for this out-of-pocket, but we also receive long term care payments paid directly to us. I have filled out form 8853. My questions:
1. Where on form 1040 do I specify the out-of-pocket expense?
2. What amount do I enter -- the entire amount we paid to the facility, or the amount minus what we received from our LTC policy?
If you are familiar with H&R Block tax software, that is what I am using to prepare my return.
Submitted: 11 months ago.
Category: Tax
Expert:  Stephen G. replied 11 months ago.
You enter your gross Medical expenses including the out-of-pocket expenses; the entire amount you paid to the facility,plus the cost of any medical insurance premiums, basically anything you paid in connection with her nursing home expenses;Then you would enter the amount that you were reimbursed relating to the expenses you claimed above.
Customer: replied 11 months ago.

So just to make sure I understand you, if I paid the facility, for example, $100,000 during calendar year 2015 and received $80,000 from my wife's LTC policy, I enter the entire $100,000 as a medical expense on Form 1040 and the $80,000 on Form 8853. Is that correct?

Expert:  Stephen G. replied 11 months ago.
I'm sorry, your question was asking about where the medical expense was entered on Form 1040, Schedule A.What part of Form 8853 are you referring to now?
Customer: replied 11 months ago.

I had mentioned Form 8853 in my original question. In any case, I am referring to Section C of Form 8853 - Long Term Care Insurance Contracts. Using a slightly different example: $150,000 paid to the facility last year, $80,000 received from the LTC policy, are these the correct values for this form:

Line 17 - $80,000

Line 18 - $80,000

Line 19 - 0

Line 20 - $80,000

Line 21 - $120,450

Line 22 - $150,000

Line 23 - $150,000

Does Line 24 get $80,000, meaning line 25 is $70,000 and line 26 is $10,000? Or does Line 24 some other value (0?) changing the calculations for lines 25 and 26?

Expert:  Stephen G. replied 11 months ago.
OK, no problem.Going over it now.Steve G.
Expert:  Stephen G. replied 11 months ago.
Line 21 365 x 330 = 120,450.Line 24 is $80,000. unless this is a pre 8/1/96 contractLine 25 is $70,000.Line 26 is $10,000. With those numbers I've indicated which are the same you calculated I agree as long as this isn't a pre 8/1/96 contractSteve G.