Sharisma suffered a serious stroke and was admitted to a nursing home for 140 days.Nursing home charges,including physician fees and other related expenses were $63,000.Under Sharisma's long-term care insurance contract,she received reimbursements of $56,000.How much of the $56,000 reimbursement must be included in Sharisma's gross income in 2019?

Question

Quizplus · Accepted Answer

According to IRS Publication 502, amounts received for qualified long-term care services generally do not count as income. However, if the amount received is more than the cost of the long-term care services, the excess may be taxable. In this case, Sharisma received $56,000 in reimbursements, which is less than the $63,000 in nursing home charges, so none of the reimbursement is taxable. Therefore, the answer is B) $4,200 (zero taxable amount).

Sharisma Suffered a Serious Stroke and Was Admitted to a Nursing