Valentino is a patient in a nursing home for 45 days of 2017. while in the nursing home, he incurs total costs of $13,500. medicare pays $8,000 of the costs. valentino receives $15,000 from his long-term care insurance policy, which pays while he is in the facility. assume that the daily federal statutory amount for valentino is $360. of the $15,000, what amount may valentino exclude from his gross income?

A person who purchases his/her own policy can exclude the benefits from gross income. It's also good to note tat statutory limitations exist for the following amounts:

Benefits that have been collected under the employer's plan

Premiums that have been paid by the employer

benefits that have been collected from the individuals' policy. Therefore the amount Valentino may exclude will be calculated as follows;

Daily statutory amount in 2017 (360*45) $16200

Actual cost of care $13500 $16200

Less: Amount received from Medicare ($8000)

Equal amount of exclusion ($8200)

Thus:

Valentino must include (15000-8200) = $6800 of the long-term care benefits received in his gross income.