Beneficiary of a foreign life insurance

[Calimerostache]

Hello,

I am the beneficiary of a life insurance of a foreign life insurance.
The insured passed away this year :'(

I received the funds this year and I am now wondering how these will be taxed in the USA where I'm a fiscal resident.
My understanding is that if I was the beneficiary of a US life insurance, this would not be taxable.
I'm just wondering if the tax treatment is the same since it comes from abroad.

Thanks for your help!

[reeshau]

The answer to this is going to depend entirely on what country the insurance policy was written in, and what their tax treaty, if any, is with the US.  Don't mess around with it; hire a tax professional familiar with the US and that country.  It will seem expensive, but less so than incurring penalties from a mistake.

(I am assuming you don't otherwise know the tax laws in the other country yourself, or have any experience filing taxes there)

To start with, do you know if the money you received was net of the local tax?

In Ireland, the tax treatment for insurance would be based on the domicile of the deceased, so you would be subject to Irish Capital Acquisition Taxes. Per the US-Irish tax treaty, you would not be subject to US income tax for it.

https://www.revenue.ie/en/gains-gifts-and-inheritance/credits-you-can-claim-against-cat/double-taxation-relief-usa.aspx

https://www.ccpc.ie/consumers/money/insurance/life-insurance/#Policy

https://www.citizensinformation.ie/en/money_and_tax/tax/capital_taxes/capital_acquisitions_tax.html