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There are two LTC periods. The first is

per diem limitation is allocated first to her

181 days (from January 1 through June

to the extent of the per diem payments

Paperwork Reduction Act Notice. We

30) during which the per diem payments

she received during the second LTC

ask for the information on this form to

were $2,000 per month. The second is

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

carry out the Internal Revenue laws of the

184 days (from July 1 through December

limitation of $17,440 is allocated between

United States. You are required to give us

31) during which the aggregate per diem

Sam and Deborah.

the information. We need it to ensure that

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

you are complying with these laws and to

Allocation ratio to Sam: 60% of the

under Mrs. Smith’s contract + $2,700

allow us to figure and collect the right

remaining limitation is allocated to Sam

under Sam’s contract + $1,800 under

amount of tax.

because the $16,200 he received during

Deborah’s contract).

the second LTC period is 60% of the

You are not required to provide the

$27,000 received by both Sam and

An aggregate statement must be

information requested on a form that is

Deborah during the second LTC period.

completed for the second LTC period and

subject to the Paperwork Reduction Act

attached to Mrs. Smith’s, Sam’s, and

unless the form displays a valid OMB

Allocation ratio to Deborah: 40% of

Deborah’s forms.

control number. Books or records relating

the remaining limitation is allocated to

to a form or its instructions must be

Deborah because the $10,800 she

Step 1. They complete a statement for

retained as long as their contents may

received during the second LTC period is

Mrs. Smith for the first LTC period as

become material in the administration of

40% of the $27,000 received by both Sam

follows.

any Internal Revenue law. Generally, tax

and Deborah during the second LTC

returns and return information are

period.

Line

Amount

confidential, as required by section 6103.

Step 4. Mrs. Smith, Sam, and Deborah

The time needed to complete and file

each complete Form 8853 as follows.

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

this form will vary depending on individual

Mrs. Smith’s Form 8853:

$38,010 ($210 x 181 days)

circumstances. The estimated average

time is:

$18,100 ($100 x 181 days)

1st LTC

2nd LTC

Line

Period

Form 8853

$38,010

Recordkeeping . . . . . . . . 1 hr., 31 min.

$9,050 ($50 x 181 days)

$12,000

$24,000

Learning about the law or

$28,960

$12,000

$40,960

the form . . . . . . . . . . . . .

34 min.

$ -0-

$-0-

Preparing the form . . . . . 1 hr., 44 min.

Step 2. They complete the aggregate

Sam’s Form 8853:

Copying, assembling, and

statement for the second LTC period as

sending the form to the

follows.

1st LTC

2nd LTC

IRS . . . . . . . . . . . . . . . . .

46 min.

Line

Period

Form 8853

Line

Amount

If you have comments concerning the

$-0-

$16,200

accuracy of these time estimates or

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

suggestions for making this form simpler,

$-0-

$10,464

we would be happy to hear from you. You

$38,640 ($210 x 184 days)

$-0-

$5,736

can write to the Tax Forms Committee,

$18,400 ($100 x 184 days)

Western Area Distribution Center,

Deborah’s Form 8853:

Rancho Cordova, CA 95743-0001. Do

$38,640

not send the form to this address.

1st LTC

2nd LTC

$9,200 ($50 x 184 days)

Instead, see Where Do You File? in the

Line

Period

Form 8853

Form 1040 instructions.

$29,440

$-0-

$10,800

$9,560

$-0-

$6,976

Step 3. They allocate the aggregate per

diem limitation of $29,440 on line 27

$-0-

$3,824

among Mrs. Smith, Sam, and Deborah.

Because Mrs. Smith is the insured, the

-8-

Instructions For Form 8853 - Archer Msas And Long-Term Care Insurance Contracts - 2002 Page 8

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