Which statement correctly describes the federal tax treatment of a tax-qualified long-term care insurance policy under IRC Section 7702B?

Question

Accepted Answer

Benefits paid under a tax-qualified policy are generally received free of federal income tax

Answer

All LTC benefits are fully taxable as ordinary income

Answer

Only premiums are tax-deductible, while benefits are taxable

Answer

Benefits are taxable unless the insured is over age 85

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