Long Term Care reimbursements

[TiredSusan]

My client got a 1099ltc with $40,000. as amount in Box 1. In box 3 the reimbursed amount box is checked. Company sent her letter stating she cancelled policy and made premium payments of $30,000. Is the didderence taxable and if so how do I report it? (will not go on Form 8853)

[Just-Lisa-Now-]

DID it reimburse for medical expenses or not?

[TiredSusan]

No it did not reimburse for any expenses. It was reimbursed for a cancelled policy.

[TiredSusan]

No it was not a reimbusements for espenses. It was a return of premiums paid totalling $30,000. What about the excess $10,000. Is it taxable?