Question

Income in Respect of a Decedent

Describe income in respect of a decedent and how it is taxed. Give some examples of IRD income.

Answer 1

Income with respect to the decedent

Income with respect to the decedent refers to income that the decedent was entitled to but had not received it at the time of death. It is not included in the deceased income tax returns either. The income must be declared by the decedent ‘s estate.

To ensure that avoidance of tax evasion, the income with respect to the decedent will be taxed to the beneficiary or the entity that inherits the income. Income with respect to the decedent also counts towards the decedent’s estate for federal tax purpose. The beneficiary can claim a tax deduction from the estate tax paid.

Examples of Income with respect to the decedent are:

• Uncollected salaries and wages
• Bonuses
• Commissions
• Vacation pay
• Sick pay
• Interest and dividend accrued
• Uncollected rents

I I hope that was helpful :)