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Question
When does income from life insurance or annuity become US source?
AI accountant’s answer:
Income from a life insurance policy or annuity becomes U.S. source income if the issuing company is a U.S. corporation, regardless of where the policyholder or annuitant lives. If you are a nonresident alien and receive life insurance or annuity payments from a U.S. corporation or its foreign subsidiary, that income is generally classified as U.S. source income. However, it's important to note that U.S. source income is not the same as taxable income. There might be tax treaties or exemptions in place that allow nonresident aliens to exclude certain U.S. source income from their U.S. taxable income. It's essential to review the particular tax treaty between the United States and your country of residence to determine how this income may be treated for tax purposes.
Comment from reviewer
Judah Broussard, EA, JD
Not Correct.
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