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Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
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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: 1 year ago.
Category: Tax
Expert:  Stephen G. replied 1 year 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 1 year 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 1 year 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 1 year 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 1 year ago.
OK, no problem.Going over it now.Steve G.
Expert:  Stephen G. replied 1 year 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.