Question

How to report benefit from foreign life insurance?

Forum|Forum|6 years ago
February 24, 2020
1 reply
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My non-US citizen father in Germany kept a German life insurance with me as the beneficiary. After his passing I received a payout to a German bank account last year. I am a US citizen, how should I report this payout? Is this taxable? Many sources on the web talk about US citizen policy holders of foreign life insurances, but I didn't find much about being a beneficiary only. Any pointers to info on the web would be appreciated. I plan to file FBAR, but I'm not sure about form 3520 or declaring income.

Not A Product Question

K

klehnhardt

As a beneficiary of Life Insurance policy you do not need to enter the proceeds as income on your tax return.

However, you might need to complete Form 3520. See Form 3520 Instructions..

To determine whether you must file Form 3520. The value of the gift or bequest received from a nonresident alien or a foreign estate—which includes gifts or bequests received from foreign persons related to the nonresident alien individual or foreign estate—must exceed $100,000 USD as of 2019.

The form is not supported by TurboTax. You will need to complete the form manually.

This form needs to mailed in with your return by April 15th. If you are receiving a refund e-file your return without the Form 3520. The amend your return to send in the Form 3520.

You will need to follow the steps on How do I amend my 2019 TurboTax Online return?