§138 — Medicare Advantage MSA
11 cases·1 distinguished·1 criticized·9 cited
Statute Text — 26 U.S.C. §138
Gross income shall not include any payment to the Medicare Advantage MSA of an individual by the Secretary of Health and Human Services under part C of title XVIII of the Social Security Act.
For purposes of this section, the term “Medicare Advantage MSA” means an Archer MSA (as defined in section 220(d))—
which is designated as a Medicare Advantage MSA,
with respect to which no contribution may be made other than—
a contribution made by the Secretary of Health and Human Services pursuant to part C of title XVIII of the Social Security Act, or
a trustee-to-trustee transfer described in subsection (c)(4),
the governing instrument of which provides that trustee-to-trustee transfers described in subsection (c)(4) may be made to and from such account, and
which is established in connection with an MSA plan described in section 1859(b)(3) of the Social Security Act.
In applying section 220 to a Medicare Advantage MSA—
qualified medical expenses shall not include amounts paid for medical care for any individual other than the account holder, and
section 220(d)(2)(C) shall not apply.
The tax imposed by this chapter for any taxable year in which there is a payment or distribution from a Medicare Advantage MSA which is not used exclusively to pay the qualified medical expenses of the account holder shall be increased by 50 percent of the excess (if any) of—
the amount of such payment or distribution, over
the excess (if any) of—
the fair market value of the assets in such MSA as of the close of the calendar year preceding the calendar year in which the taxable year begins, over
an amount equal to 60 percent of the deductible under the Medicare Advantage MSA plan covering the account holder as of January 1 of the calendar year in which the taxable year begins.
Section 220(f)(4) shall not apply to any payment or distribution from a Medicare Advantage MSA.
Subparagraph (A) shall not apply if the payment or distribution is made on or after the date the account holder—
becomes disabled within the meaning of section 72(m)(7), or
dies.
For purposes of subparagraph (A)—
all Medicare Advantage MSAs of the account holder shall be treated as 1 account,
all payments and distributions not used exclusively to pay the qualified medical expenses of the account holder during any taxable year shall be treated as 1 distribution, and
any distribution of property shall be taken into account at its fair market value on the date of the distribution.
Section 220(f)(2) and paragraph (2) of this subsection shall not apply to any payment or distribution from a Medicare Advantage MSA to the Secretary of Health and Human Services of an erroneous contribution to such MSA and of the net income attributable to such contribution.
Section 220(f)(2) and paragraph (2) of this subsection shall not apply to any trustee-to-trustee transfer from a Medicare Advantage MSA of an account holder to another Medicare Advantage MSA of such account holder.
In applying section 220(f)(8)(A) to an account which was a Medicare Advantage MSA of a decedent, the rules of section 220(f) shall apply in lieu of the rules of subsection (c) of this section with respect to the spouse as the account holder of such Medicare Advantage MSA.
In the case of a Medicare Advantage MSA, the report under section 220(h)—
shall include the fair market value of the assets in such Medicare Advantage MSA as of the close of each calendar year, and
shall be furnished to the account holder—
not later than January 31 of the calendar year following the calendar year to which such reports relate, and
in such manner as the Secretary prescribes in such regulations.
Subsection (i) of section 220 shall not apply to an individual with respect to a Medicare Advantage MSA, and Medicare Advantage MSAs shall not be taken into account in determining whether the numerical limitations under section 220(j) are exceeded.
11 Citing Cases
138.04 (2001-2002). 2Postnotice interest is calculated pursuant to sec. 6601(a). 3Aug. 15, 2001, is the date that SCC's income tax payment was due for its short year ended May31, 2001. See secs. 6151(a), 6072(b). 4Aug. 21, 2008, is the date the transferee notice ofliability statements were issued. .5Nov. 14, 2015, is an arbitrary ending date s
at 672. The House Ways and Means Committee report accompanyingthe House bill (adopted in conference with modifications not pertinent herein), in describing the definition ofan LPR set forth in those provisions, states as follows: The bill defines lawful permanent resident to mean an individual who has the status ofhaving been law
672. - 17 - The term “residence” and “domicile” are not synonymous; however, to be a resident, the taxpayer must have some degree of permanent attachment to the country of residence. Park v. Commissioner, 79 T.C. 252, 287 (1982), affd. without published opinion 755 F.2d 181 (D.C. Cir. 1985). An individual may be a resident of th
- 25 - analogous to this case, we think a more instructive case is In re Marriage of Benjamins, 31 Cal. Rptr. 2d 313 (Ct. App. 1994). That case involved a payor spouse’s obligation under a marital settlement agreement (the terms of which were incorporated in the divorce decree) to pay the payee spouse, on or before September 1, 1991, an
672. - 17 - The term “residence” and “domicile” are not synonymous; however, to be a resident, the taxpayer must have some degree of permanent attachment to the country of residence. Park v. Commissioner, 79 T.C. 252, 287 (1982), affd. without published opinion 755 F.2d 181 (D.C. Cir. 1985). An individual may be a resident of th