Question

Vanessa spent 45 days of 2020 in a nursing home. The cost of the services provided to her was $18,900. Medicare paid $7,900 toward the cost of her stay. Vanessa also received $9,100 of benefits under a long-term care insurance policy she purchased. The 2020 per diem rate is $380.

What is the effect on Vanessa’s gross income?
Her available exclusion is $, therefore, the amount included in her gross income is $.

Answer 1

Solution:

Daily Statutory amount = $380 * 45 days = $17,100

Actual cost of services = $18,900 , higher of the two.

Amount received from medicare = $7,900

1. Amount of Exclusion = $18,900 - $7,900 = $11,000

2.Amount included in her gross income = $9,100 - $11,000 = -$1,900

We can not take negative figure here , So amont included in her gross income is $0

There will be no effect on Vanessa's gross income.