Answer:
Amount included in gross income of Helen is $0.
Hence, There will be no effect upon the gross income of Helen.
Explanation:
Data Given:
Number of Days Helen Spent = 85 days
Cost of the services = $27,625
Medicare Paid = $8400
Benefits received = $15440
Assumption: Federal Daily Excludible amount = $380
Solution:
Daily Statutory amount = Daily Excludible amount x number days spent
Daily Statutory amount = $380 x 85 days
Daily Statutory amount = $32300
We know that,
Amount of Medicare Paid = $8400
So, now we need to calculate the amount of exclusion first.
1. Amount of Exclusion = cost of the services - Medicare paid
Amount of Exclusion = $27625 - $8400 = $19225
So, now we calculate the amount included into the gross income of Helen.
2. Amount included in gross income = Benefits Received - Amount of Exclusion
Amount included in gross income = $15440 - $19225
Amount included in gross income = -$3785
Here, we will not cater the negative, which means that amount included in gross income of Helen is $0.
Hence, There will be no effect upon the gross income of Helen.
