Instructions For Form 8853 - 2009 (Page 5 of 8) in pdf

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lines 10, 11, 12, and 13b from the two

Enter the name(s) shown on your tax

You cannot take a deduction on

statement Forms 8853 and enter those

return and your SSN in the spaces

Schedule A (Form 1040) for any

totals on the respective lines of the

provided at the top of the form. Skip

amount you include on line 11.

CAUTION

controlling Form 8853 (the combined

Section A.

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Lines 13a and 13b

Form 8853 for both spouses). If either

On line 10, enter the fair market value

spouse checked the box on line 13a of

of the Medicare Advantage MSA as of the

Additional 50% Tax

the statement Form 8853, check the box

date of death.

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on the controlling Form 8853. Attach the

On line 11, for a beneficiary other than

Medicare Advantage MSA distributions

two statement Forms 8853 to your tax

the estate, enter qualified medical

included in income (line 12) may be

return after the controlling Form 8853.

expenses incurred by the account holder

subject to an additional 50% tax unless

before the date of death that you paid

one of the following exceptions applies.

If you (or your spouse, if filing

within 1 year after the date of death.

jointly) received distributions from

Exceptions to the Additional 50%

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Complete the rest of Section B.

a Medicare Advantage MSA in

Tax

CAUTION

2009, you must file Form 8853 with a

If the account holder’s estate is the

The additional 50% tax does not apply to

Form 1040 even if you have no taxable

beneficiary, the value of the Medicare

distributions made on or after the date

income or any other reason for filing Form

Advantage MSA as of the date of death is

that the account holder —

1040.

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included in the account holder’s final

Dies, or

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income tax return.

Becomes disabled (see page 1).

Medicare Advantage MSA

If either of the exceptions applies to any

The distribution is not subject to the

of the distributions included on line 12,

A Medicare Advantage MSA is an Archer

additional 50% tax. Report any earnings

check the box on line 13a. Next, if either

MSA designated as a Medicare

on the account after the date of death as

of the exceptions applies to all the

Advantage MSA to be used solely to pay

income on your tax return.

distributions included on line 12, enter -0-

the qualified medical expenses of the

on line 13b. Otherwise, complete the

account holder. To be eligible for a

Note. If, during the tax year, you are the

worksheet below to figure the amount of

Medicare Advantage MSA, you must be

beneficiary of 2 or more Medicare

the additional 50% tax to enter on line

enrolled in Medicare and have an HDHP

Advantage MSAs or you are a beneficiary

13b.

that meets the Medicare guidelines.

of a Medicare Advantage MSA and you

Contributions to the account can be made

have your own Medicare Advantage

Section C—Long-Term

only by Medicare. The contributions and

MSA, you must complete a separate

any earnings, while in the account, are

Care (LTC) Insurance

Form 8853 for each MSA. Enter

not taxable to the account holder. A

“statement” at the top of each Form 8853

distribution used exclusively to pay for the

Contracts

and complete the form as instructed.

qualified medical expenses of the account

Next, complete a controlling Form 8853,

See Filing Requirements for Section C on

holder is not taxable. Distributions that

combining the amounts shown on each of

page 6.

are not used for qualified medical

the statement Forms 8853. Attach the

expenses of the account holder are

Definitions

statements to your tax return after the

included in income and also may be

controlling Form 8853.

subject to a penalty.

Policyholder

The policyholder is the person who owns

Death of Account Holder

Line 10

the proceeds of the LTC insurance

If the account holder’s surviving spouse is

Enter the total distributions you received

contract, life insurance contract, or viatical

the designated beneficiary, the Medicare

in 2009 from all Medicare Advantage

settlement, and also can be the insured

Advantage MSA is treated as a regular

MSAs. These amounts should be shown

individual. The policyholder is required to

Archer MSA (not a Medicare Advantage

in box 1 of Form 1099-SA. This amount

report the income, even if payment is

MSA) of the surviving spouse for

should not include any erroneous

assigned to a third party or parties. In the

distribution purposes. Follow the

contributions made by Medicare (or any

case of a group contract, the certificate

instructions in Section A for Death of

earnings on the erroneous contributions)

holder is considered to be the

Account Holder on page 2.

or any amounts from a trustee-to-trustee

policyholder.

transfer from one Medicare Advantage

If the designated beneficiary is not the

MSA to another Medicare Advantage

Qualified LTC Insurance Contract

account holder’s surviving spouse, or

MSA of the same account holder.

there is no designated beneficiary, the

A qualified LTC insurance contract is a

account ceases to be an MSA as of the

contract issued:

Line 11

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date of death. The beneficiary completes

After December 31, 1996, that meets

Form 8853 as follows.

Enter the total distributions from all

the requirements of section 7702B,

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Enter “Death of Medicare Advantage

Medicare Advantage MSAs in 2009 that

including the requirement that the insured

MSA account holder” across the top of

were used only for the account holder’s

must be a chronically ill individual

Form 8853.

qualified medical expenses (see page 1).

(defined on page 6), or

Additional 50% Tax Worksheet—Line 13b

Keep for Your Records

1. Enter the total distributions included on Form 8853, line 12, that do not meet either of the exceptions to the additional

50% tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Did you have a Medicare Advantage MSA on December 31, 2008?

STOP

No.

Enter one-half of line 1 on Form 8853, line 13b

Yes. Enter the value of your Medicare Advantage MSA on December 31, 2008 . . . . . . . . .

3. Enter the amount of the annual deductible for your HDHP policy on

January 1, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Multiply line 3 by 60% (.60) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Subtract line 4 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Subtract line 5 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7. Enter one-half of line 6 here and on Form 8853, line 13b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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