1099-LTC for refund of premiums

[Bucky]

Client had a long term care policy that after 10 years refunds 80% of premiums paid if policy was not used. 2006 was the tenth year and client received 1099-LTC in the amount of $19329.00. They also have box 3 checked as per diem. Not sure how to report this. It should not all be income although a few years she was able to deduct the premium as medical expense but that was very little. Any help would be appreciated.

Bucky

[LTS]

me too

i also have one of these. any insights? it doesn't seem like this should be reported as income. thanks.

[Dervis]

Refund of deduction

If they had any benefit from deducting premiums in the past, I would put that amount on Line 21 as taxable recovery of LTC premiums and forget the rest.

[Davc]

i also have one of these. any insights? it doesn't seem like this should be reported as income. thanks.

See TTB page 4-7. If the refund can be taken as cash, the policy was not a "qualified Long-term Care" policy and the premiums should not have been taken as a medical expense.