Hi,
My wife suffered a bad accident last year and thankfully recovered. She will receive a payment from a foreign insurance firm as compensation for her physical injuries. This payment can be either directed to her parent's foreign bank account or to her US bank account. She is a non-US citizen and is thinking of keeping the money in her parent's foreign bank account to financially support them. I have several questions that I'm hoping folks can help us with:
1) Are there any US tax consequences of directing an insurance payment to a foreign bank account? I presume no.
2) Are there any US tax consequences of directing the insurance payment to her US bank account? I also think the answer is no.
3) If she needs to transfer some of this money from the foreign bank account to the US in the future, would that incur taxes?
4) Do I need to report this insurance payment in TurboTax and if so, where/how?
Thanks very much.
