My problematic situation arose because I was using two LTC policies to pay for my wife's care, one for her solely and the other jointly for the two of us. As "encouraged" by the insurance company customer service representatives, I initially made claims on both policies using the same invoices, but soon afterward felt as if I were double-dipping. After a while, I stopped making the double claims and instead alternated between policies for reimbursements. However, the double payments continued, and it took some time for the have payments to be made on each policy only when I requested it.
Boxes 3 and 4 on both 1099-LTCs indicate that the payments were reimbursements on qualified contracts. In responding to the TurboTax directions as well as the IRS instructions for Form 8853, I understood the definition of "per diem" in this context, but had no idea how to interpret "or other periodic basis." Was the meaning analogous to "diem," but using an extended united of time such as weekly, monthly, or annually?
Or, could it have meant something other than "per diem," such as reimbursement, a word to which I saw virtually no references in either the TurboTax or IRS instructions. Nevertheless, it struck me that "per diem" was so strongly emphasized that the user's situation was either per diem (and we'll guide you through) or you're on your own.
In order for me to answer TurboTax questions referring to page 2 of IRS Form 8853 with this newfound knowledge, assuming no accelerated death benefits, the answers to questions 17 through 20 should all be zero ($0) if the payments are reimbursements. In going further onto questions 21 through 25, because $410 multiplied by the number of days in the LTC period is larger than the actual expenses in many or most cases, the concepts behind the calculations here are more relevant to per diem payments, and the actual expenses become irrelevant. Thus, taxable payments of line 26, is irrelevant for most reimbursed payments. And that's the reason I could never have it come out to something reasonable, such as the difference between expenses and reimbursements, if I were to actually have to pay taxes on it.
Thank you for your guidance, Amy C. It was most helpful. I apologize for the length of this response.
My only remaining problem now is to figure out how to wipe out the answers I had previously given to TurboTax and to start again in this section.
