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Mrs. Smith’s Form 8853:

attached to the Form 8853 for each

An aggregate statement must be

person who received a payment.

completed for the second LTC period and

1st LTC

2nd LTC

attached to Mrs. Smith’s, Sam’s, and

Enter your share of the per diem

Line

Period

Form 8853

Deborah’s forms.

limitation and the taxable payments on

lines 27 and 28 of your individual Form

Step 1. They complete a statement for

$12,000

$24,000

Mrs. Smith for the first LTC period as

8853. Leave lines 23 through 26 blank.

follows.

$35,490

$12,000

$47,490

Example 1

$ -0-

$-0-

Mrs. Smith was chronically ill throughout

Line

Amount

2008 and received 12 monthly payments

Sam’s Form 8853:

on a per diem basis from a qualified LTC

$12,000 ($2,000 x 6 mos.)

insurance contract. She was paid $2,000

1st LTC

2nd LTC

$49,140 ($270 x 182 days)

per month ($24,000 total). Mrs. Smith

Line

Period

Form 8853

incurred expenses for qualified LTC

$27,300 ($150 x 182 days)

services of $150 per day ($54,900) and

$-0-

$16,200

$49,140

was reimbursed for one-half of those

$-0-

$14,328

expenses ($27,450). She uses the equal

$13,650 ($75 x 182 days)

payment rate method and therefore has a

$-0-

$ 1,872

$35,490

single benefit period for 2008 (January

Deborah’s Form 8853:

1 – December 31). Mrs. Smith completes

$ -0-

Form 8853, lines 22 through 28, as

Step 2. They complete the aggregate

1st LTC

2nd LTC

follows.

statement for the second LTC period as

Line

Period

Form 8853

follows.

Line

Amount

$-0-

$10,800

Line

Amount

$-0-

$ 9,552

$24,000 ($2,000 x 12 mos.)

$98,820 ($270 x 366 days)

$-0-

$ 1,248

$39,000 ($6,500 x 6 mos.)

$54,900 ($150 x 366 days)

$49,680 ($270 x 184 days)

Paperwork Reduction Act Notice. We

$98,820

$27,600 ($150 x 184 days)

ask for the information on this form to

carry out the Internal Revenue laws of the

$27,450 ($75 x 366 days)

$49,680

United States. You are required to give us

$71,370

$13,800 ($75 x 184 days)

the information. We need it to ensure that

you are complying with these laws and to

$-0-

$35,880

allow us to figure and collect the right

$3,120

Example 2

amount of tax.

The facts are the same as in Example 1,

You are not required to provide the

Step 3. They allocate the aggregate per

except Mrs. Smith’s son, Sam, and

information requested on a form that is

diem limitation of $35,880 on line 27

subject to the Paperwork Reduction Act

daughter, Deborah, each also own a

among Mrs. Smith, Sam, and Deborah.

qualified LTC insurance contract under

unless the form displays a valid OMB

Because Mrs. Smith is the insured, the

which Mrs. Smith is the insured. Neither

control number. Books or records relating

per diem limitation is allocated first to her

Sam nor Deborah incurred any costs for

to a form or its instructions must be

to the extent of the per diem payments

retained as long as their contents may

qualified LTC services for Mrs. Smith in

she received during the second LTC

2008. From July 1, 2008, through

become material in the administration of

period ($12,000). The remaining per diem

December 31, 2008, Sam received per

any Internal Revenue law. Generally, tax

limitation of $23,880 is allocated between

returns and return information are

diem payments of $2,700 per month

Sam and Deborah.

($16,200 total) and Deborah received per

confidential, as required by section 6103.

Allocation ratio to Sam: 60% of the

diem payments of $1,800 per month

The average time and expenses

remaining limitation ($14,328) is allocated

($10,800 total). Mrs. Smith, Sam, and

required to complete and file this form will

to Sam because the $16,200 he received

Deborah agree to use the equal payment

vary depending on individual

during the second LTC period is 60% of

rate method to determine their LTC

the $27,000 received by both Sam and

circumstances. For estimated averages,

periods.

see the instructions for your income tax

Deborah during the second LTC period.

There are two LTC periods. The first is

return.

Allocation ratio to Deborah: 40% of

182 days (from January 1 through June

If you have suggestions for making this

the remaining limitation ($9,552) is

30) during which the per diem payments

allocated to Deborah because the

form simpler, we would be happy to hear

were $2,000 per month. The second is

$10,800 she received during the second

from you. See the instructions for your

184 days (from July 1 through December

income tax return.

LTC period is 40% of the $27,000

31) during which the aggregate per diem

received by both Sam and Deborah

payments were $6,500 per month ($2,000

during the second LTC period.

under Mrs. Smith’s contract + $2,700

Step 4. Mrs. Smith, Sam, and Deborah

under Sam’s contract + $1,800 under

each complete Form 8853 as follows.

Deborah’s contract).

-8-

Instructions For Form 8853 - Archer Msas And Long-Term Care Insurance Contracts - 2008 Page 8

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