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

Example 1

Step 1. They complete a statement for

Step 4. Mrs. Smith, Sam, and Deborah

Mrs. Smith for the first LTC period as

each complete Form 8853 as follows.

Mrs. Smith was chronically ill throughout

follows.

Mrs. Smith’s Form 8853:

2011 and received 12 monthly payments

on a per diem basis from a qualified LTC

Line

Amount

1st LTC

2nd LTC

insurance contract. She was paid $2,000

Line

Period

Form 8853

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

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

incurred expenses for qualified LTC

$12,000

$24,000

services of $150 per day ($54,750) and

$54,300 ($300 x 181 days)

was reimbursed for one-half of those

$40,725

$12,000

$52,725

$27,150 ($150 x 181 days)

expenses ($27,375). She uses the equal

$ -0-

payment rate method and therefore has a

$54,300

single benefit period for 2011 (January

Sam’s Form 8853:

$13,575 ($75 x 181 days)

1 – December 31). Mrs. Smith completes

$40,725

Form 8853, lines 20 through 26, as

1st LTC

2nd LTC

follows.

$ -0-

Line

Period

Form 8853

Step 2. They complete the aggregate

Line

Amount

$ -0-

$18,000

statement for the second LTC period as

$ -0-

$17,640

follows.

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

$ -0-

$ 360

$109,500 ($300 x 365 days)

Line

Amount

Deborah’s Form 8853:

$54,750 ($150 x 365 days)

$42,000 ($7,000 x 6 mos.)

$109,500

1st LTC

2nd LTC

$55,200 ($300 x 184 days)

Line

Period

Form 8853

$27,375 ($75 x 365 days)

$27,600 ($150 x 184 days)

$82,125

$ -0-

$12,000

$55,200

$ -0-

$11,760

$13,800 ($75 x 184 days)

Example 2

$ -0-

240

$41,400

The facts are the same as in Example 1,

$600

except Mrs. Smith’s son, Sam, and

daughter, Deborah, each also own a

Step 3. They allocate the aggregate per

qualified LTC insurance contract under

diem limitation of $41,400 on line 25

which Mrs. Smith is the insured. Neither

among Mrs. Smith, Sam, and Deborah.

Sam nor Deborah incurred any costs for

Because Mrs. Smith is the insured, the

qualified LTC services for Mrs. Smith in

per diem limitation is allocated first to her

2011. From July 1, 2011, through

to the extent of the per diem payments

December 31, 2011, Sam received per

she received during the second LTC

diem payments of $3,000 per month

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

($18,000 total) and Deborah received per

limitation of $29,400 is allocated between

diem payments of $2,000 per month

Sam and Deborah.

($12,000 total). Mrs. Smith, Sam, and

Allocation ratio to Sam: 60% of the

Deborah agree to use the equal payment

remaining limitation ($17,640) is allocated

rate method to determine their LTC

to Sam because the $18,000 he received

periods.

during the second LTC period is 60% of

There are two LTC periods. The first is

the $30,000 received by both Sam and

181 days (from January 1 through June

Deborah during the second LTC period.

30) during which the per diem payments

Allocation ratio to Deborah: 40% of

were $2,000 per month. The second is

the remaining limitation ($11,760) is

184 days (from July 1 through December

allocated to Deborah because the

31) during which the aggregate per diem

$12,000 she received during the second

payments were $7,000 per month ($2,000

LTC period is 40% of the $30,000

under Mrs. Smith’s contract + $3,000

received by both Sam and Deborah

under Sam’s contract + $2,000 under

during the second LTC period.

Deborah’s contract).

An aggregate statement must be

completed for the second LTC period and

attached to Mrs. Smith’s, Sam’s, and

Deborah’s forms.

-8-

Instructions for Form 8853 (2011)

Instructions For Form 8853 - 2011 Page 8

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