1099-ltc

[Gretel]

I looked at older posts, TTB and instructions and pg. 2 of form 8853 but still don't feel confident with my conclusion.

T/P receives accelerated death benefits as reimbursements and is neither terminally nor chronically ill as determined by IRS. Since he doesn't have any expenses the only reimbursement received is probably for premiums paid.

If premiums were allowable as deduction in prior years than reimbursement is taxable.

If premiums were not allowable because it wasn't a qualified plan then the payment is non taxable.

Does this sound right?

[BHoffman]

I don't know, but I'll give you a bump

[Gretel]

Meanwhile I know for sure that insurance was a non-qualified plan so disability payments won't be taxable.

[Mo Sheets]

Need more information....

Is the money received from a disability policy or a life insurance policy?

If it is a life insurance policy on an individual and the individual paid the premiums, only the portion that exceeds the net premiums paid would be taxable.

I'll be happy to do more digging for you....just need more information.

Thanks!

Mo

[Gretel]

Mo Sheet, what a great offer! Thank you so much. Where do you go for your digging? Maybe we can meet there?

Anyway, I was able to talk to ins.co. and - lo and behold - they gave me the info needed. It's a life insurance policy with no earnings that makes disability payments for a number of years. All this time client still pays reduced premiums and after last disability payment his premiums will go up.