Instructions For Form 8853 - 2011 (Page 5 of 8) in pdf

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Lines 13a and 13b

the statement Form 8853, check the box

On line 10, enter the fair market value

on the controlling Form 8853. Attach the

of the Medicare Advantage MSA as of the

Additional 50% Tax

two statement Forms 8853 to your tax

date of death.

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return after the controlling Form 8853.

On line 11, for a beneficiary other than

Medicare Advantage MSA distributions

the estate, enter qualified medical

included in income (line 12) may be

If you (or your spouse, if filing

expenses incurred by the account holder

subject to an additional 50% tax unless

jointly) received distributions from

before the date of death that you paid

one of the following exceptions applies.

a Medicare Advantage MSA in

within 1 year after the date of death.

CAUTION

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2011, you must file Form 8853 with a

Complete the rest of Section B.

Exceptions to the Additional 50%

Form 1040 even if you have no taxable

Tax

If the account holder’s estate is the

income or any other reason for filing Form

The additional 50% tax does not apply to

beneficiary, the value of the Medicare

1040.

distributions made on or after the date

Advantage MSA as of the date of death is

that the account holder —

included in the account holder’s final

Medicare Advantage MSA

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Dies, or

income tax return.

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A Medicare Advantage MSA is an Archer

Becomes disabled (see page 1).

The distribution is not subject to the

MSA designated as a Medicare

If either of the exceptions applies to any

additional 50% tax. Report any earnings

Advantage MSA to be used solely to pay

of the distributions included on line 12,

on the account after the date of death as

the qualified medical expenses of the

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

income on your tax return.

account holder. To be eligible for a

of the exceptions applies to all the

Medicare Advantage MSA, you must be

distributions included on line 12, enter -0-

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

enrolled in Medicare and have an HDHP

on line 13b. Otherwise, complete the

beneficiary of 2 or more Medicare

that meets the Medicare guidelines.

worksheet below to figure the amount of

Advantage MSAs or you are a beneficiary

Contributions to the account can be made

the additional 50% tax to enter on line

of a Medicare Advantage MSA and you

only by Medicare. The contributions and

13b.

have your own Medicare Advantage

any earnings, while in the account, are

MSA, you must complete a separate

not taxable to the account holder. A

Section C—Long-Term

Form 8853 for each MSA. Enter

distribution used exclusively to pay for the

“statement” at the top of each Form 8853

Care (LTC) Insurance

qualified medical expenses of the account

and complete the form as instructed.

holder is not taxable. Distributions that

Contracts

Next, complete a controlling Form 8853,

are not used for qualified medical

combining the amounts shown on each of

See Filing Requirements for Section C on

expenses of the account holder are

the statement Forms 8853. Attach the

page 6.

included in income and also may be

statements to your tax return after the

subject to a penalty.

controlling Form 8853.

For more information, see Pub. 502.

Death of Account Holder

Line 10

Definitions

If the account holder’s surviving spouse is

Enter the total distributions you received

the designated beneficiary, the Medicare

Policyholder

in 2011 from all Medicare Advantage

Advantage MSA is treated as a regular

MSAs. These amounts should be shown

The policyholder is the person who owns

Archer MSA (not a Medicare Advantage

in box 1 of Form 1099-SA. This amount

the proceeds of the LTC insurance

MSA) of the surviving spouse for

should not include any erroneous

contract, life insurance contract, or viatical

distribution purposes. Follow the

contributions made by Medicare (or any

settlement, and also can be the insured

instructions in Section A for Death of

earnings on the erroneous contributions)

individual. The policyholder is required to

Account Holder on page 2.

or any amounts from a trustee-to-trustee

report the income, even if payment is

transfer from one Medicare Advantage

If the designated beneficiary is not the

assigned to a third party or parties. In the

MSA to another Medicare Advantage

account holder’s surviving spouse, or

case of a group contract, the certificate

MSA of the same account holder.

there is no designated beneficiary, the

holder is considered to be the

account ceases to be an MSA as of the

policyholder.

Line 11

date of death. The beneficiary completes

Qualified LTC Insurance Contract

Form 8853 as follows.

Enter the total distributions from all

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Enter “Death of Medicare Advantage

A qualified LTC insurance contract is a

Medicare Advantage MSAs in 2011 that

MSA account holder” across the top of

were used only for the account holder’s

contract issued:

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Form 8853.

qualified medical expenses (see page 1).

After December 31, 1996, that meets

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Enter the name(s) shown on your tax

the requirements of section 7702B,

You cannot take a deduction on

return and your SSN in the spaces

including the requirement that the insured

Schedule A (Form 1040) for any

provided at the top of the form. Skip

must be a chronically ill individual

amount you include on line 11.

Section A.

(defined on page 6), or

CAUTION

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, 2010?

No.

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

STOP

Yes. Enter the value of your Medicare Advantage MSA on December 31, 2010 . . . . . . . . .

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

January 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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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Instructions for Form 8853 (2011)