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Lloyd is chronically-ill and received tax-qualified long-term care insurance benefits in 2018 amounting to $8,000 to cover a 30-day nursing home stay. What amount, if any, must he include in income if actual nursing home costs for the 30 days amounted to $7,500 and the applicable per dier limitation was $360?

A) $0
B) $500
C) $7,500
D) $8,000

Respuesta :

Karabo99

Answer:

A) $0

Explanation:

as per IRC section 101g, if the payment exceeds the greater of per actual cost then the excess payment amount will be taxable.

total tax free payment = 360*30

                                      = $10,800

Therefore, The taxable amount is $0

anthougo

Lloyd will include A) $0 of insurance benefits in his income.

Data and Calculations:

Tax-qualified long-term care insurance benefits received = $8,000

Number of nursing home stay days = 30 days

Actual nursing home costs for the 30 days = $7,500

Applicable per day limitation = $360

The total per day limitation = $10,800 ($360 x 30)

Since Lloyd is chronically ill, the $8,000 insurance benefits he received his life insurance contract is treated under § 101(g) as an amount received by reason of death and excluded from his gross income.

Thus, Lloyd will include A) $0 of insurance benefits in his income.

Learn more about the insurance benefits of terminally or chronically-ill persons here: https://brainly.com/question/16393027

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