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Are Term Care Insurance distributions taxable? Our CPA has…

Customer Question
Are Long Term Care...

Are Long Term Care Insurance distributions taxable?

Accountant's Assistant: Have you talked to a tax professional about this?

Our CPA has included them as income for my father-in-law who is presently in an assisted living facility. This is the first year we have received any distribution from the policy. Non-accountant friends say such is not taxable.

Accountant's Assistant: Anything else you want the Accountant to know before I connect you?

No, that’s the only question.

Submitted: 4 months ago.Category: Tax
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4/13/2018
Tax Professional: Lev, Tax Advisor replied 4 months ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 33,340
Experience: Taxes, Immigration, Labor Relations
Verified

These should NOT be taxable.

You should have form 1099LTC reporting these distributions

With his tax return - use from 8853

https://www.irs.gov/pub/irs-pdf/f8853.pdf

second page - Section C. Long-Term Care (LTC) Insurance Contracts

follow instructions - and most likely - none will be taxable.

In rare situations - when distributions are too large - a part may be taxable.

Please provide that information to your CPA for considerations.

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Tax Professional: Lev, Tax Advisor replied 4 months ago

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