Legal Question in Tax Law in California

LTC deductable from Schedule C Income

I recieve ''income'' from the sale of oil and gas from oil and gas wells (direct ownership, not a partnership) in which I have a small percentage ownership (in about 20+ wells). I report this income, and related expenses, on Schedule C. I also recieve ''income'' form interest and dividends (investments), some capital gains (investments), several partnership in which I own an small interest, a pension, social security (I am 70+), and withdrawals/distributions from an IRA. According to several tax books, and IRS publications, I can deduct LTC (long term care) insurance premiums from the Schedule C income-- ''IF: ''a) you purchased a qualifying policy (Tax -Qualified) AND b) you are self employed''. How much--in percentage of total ''income'', or total dollars--must my Schedule C income be in order for the IRS to accept the LTC premium deduction?


Asked on 7/15/03, 1:49 am

1 Answer from Attorneys
Dan Lively The Lively Law Group, PC

Re: LTC deductable from Schedule C Income

Premiums for LTC insurance contracts was added to the definition of "medical care" in 1997. The amount of the premium that is deductible is limited by age. For age 71 and older the max deduction is $2,860.

Self employed persons can deduct from gross income 100% of the cost in 2003. This is an adjustment to gross income and not a deduction from Schedule C.

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Answered on 7/16/03, 3:15 am


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