@samgup wrote:
Thanks @pk and @Opus 17 for your responses.
Few questions
1: Is this the correct way to calculate net profit for tax calculation?
Net profit ($) = "Total net proceeds in $ when received" minus "Total premium ($ value of each premium per that year's currency conversion rate when the premium was paid)"
2: Will the net profit be shown as other income or Interest?
Yes, you would value the premiums at the exchange rate on the day you paid them and the cash surrender value on the day you received it. You would report this as dividend or interest income. There should be a place to check "I did not receive a 1099 form from this payer" after entering the payer's name.
If you also paid foreign tax (in India) on this money, you can take a deduction or credit. It's on the Deductions and Credits page under Foreign Taxes paid, and this would be passive income.
