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1099 long term care payments received

michele
Level 5

I have a long term care 1099 that  has funds for expenses in 2019 and 2020

The expenses were not taken in 2019 and they amount to 60,000+ can they be considered for this 1099 I do not want them to have to pay tax on the 60,000

 

thx 

Michele

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qbteachmt
Level 15

I see you haven't gotten any replies, yet. I think it's because there is a bit of confusion over perspective.

A 1099-What was issued to whom for what reason? Are you asking about the Sender or the Receiver? Are you trying to write off 2019 expenses in 2020?

"can they be considered for this 1099 I do not want them to have to pay tax on the 60,000"

In general, a tax year has reported income and the associated expenses, for a Cash Basis tax payer, are from that same year, You would not "carry forward" expenses.

And, yes, they will pay taxes on whatever is taxable.

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michele
Level 5

The receiver received over $100,000 but 64,000 of that was for expenses in 2019. I believe the trustee of this person did not get these submitted timely and they were paid in 2020 although all the money went to the care facility it looks like they will have a heafty tax bill since these were 2019 expenses.

 

thx

Michele

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qbteachmt
Level 15

"The receiver received over $100,000"

Of what, from whom? Examples:

An insurance plan. An Annuity. An employer medical expense reimbursement plan.

"but 64,000 of that was for expenses in 2019."

How were these handled in 2019? Were they deducted on the personal tax return? Are they even deductible? Are you describing a guardianship or caretaker that spent the funds on the ward, then got reimbursed from a trustee? Is this an inhome care provider contract?

"I believe the trustee of this person did not get these submitted timely and they were paid in 2020 although all the money went to the care facility it looks like they will have a heafty tax bill since these were 2019 expenses."

A trust that pays out income to or on behalf of the beneficiary has nothing to do with Expenses being tax deductible or not.

Is this a 1099-R? Are the expenses covered as Medical, or Board and Care, or?

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michele
Level 5

It was a long term care insurance policy that paid her then she had to turn around and pay the nursing home. All the money was spent on her care but just a sad situation since the  expenses were charged to her in 2019 and she was not able to pay them until she received the money in 2020.

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qbteachmt
Level 15

"and she was not able to pay them until she received the money in 2020."

Then 2019 is meaningless. You have a scenario of expenses Paid in 2020 for a cash basis tax payer. Read Pub 502.

https://www.irs.gov/taxtopics/tc502

Have you confirmed the LTC payouts are taxable?

You might be worrying about two conditions that don't apply.

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qbteachmt
Level 15

Is this what you need:

https://www.irs.gov/instructions/i1099ltc

 

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