I have an unusual situation that I can’t find any information on. My grandfather was a US citizen and US resident who recently died. He owned a whole life policy with Phoenix Life. Just before he died, he transferred the ownership of the policy from him to me and I surrendered it for the cash value several months after he died. I’m a Canadian citizen and resident of Canada. I just received a 1042-S slip with the following info in the following boxes:
Box 1: Income code 15
Box 2: Gross income $75K
Box 3: Chapter indicator “3â€
Box 3a: Exemption code 00
Box 4a: Exemption code 15
Box 3b: Tax rate 15
Box 4b: Tax rate 00
Box 6: Net income $75K
Box 13f: Ch 3 status code 16
Does anyone know if this is taxable to me in either the US, Canada or both?
1042-S Taxable????
Moderator: Mark T Serbinski CA CPA
Thank you so much!!
Yes correct, no tax was withheld. I have no ITIN, so I was really hoping no US return was required.
Just curious, is this because the tax on this policy would have been paid for by grandfather upon transfer of the ownership to me or perhaps it has something to do with the treaty and being exempted?
Either way I'm very relived to hear it's not taxable.
Yes correct, no tax was withheld. I have no ITIN, so I was really hoping no US return was required.
Just curious, is this because the tax on this policy would have been paid for by grandfather upon transfer of the ownership to me or perhaps it has something to do with the treaty and being exempted?
Either way I'm very relived to hear it's not taxable.