Income in respect of a decedent (IRD), is income earned by the decedent but not yet paid to that person before their death. This income is included in the gross income of the final recipient and is fully taxable for income tax purposes.

Assets Qualifying as IRD
Income in respect of a decedent is not defined in the Code. However, the IRS defines it as "amounts to which a decedent was entitled as gross income but which were not properly includible in computing his taxable income for the taxable year ending with the date of death or for a previous taxable year…"



Examples of income qualifying as an IRD include: wages, farm income, partnership income, accrued interest, dividends paid on stocks after the holder's death, individual retirement account (IRA) distributions, qualified plan distributions, lottery prize winnings and installment sale proceeds.



Calculation for IRD Deduction

Related Articles
  1. Taxes

    Explaining Taxable Income

    Taxable income is the net of gross income and allowable deductions.
  2. Taxes

    Ten Things That You Might Not Know Are Taxable

    When you file your taxes this year make sure that you have claimed all taxable income. Here are ten things that you might not know are taxable
  3. Personal Finance

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  4. Retirement

    Tax-Saving Advice for IRA Holders

    Be informed about benefits and deductions that may apply to you and avoid costly mistakes on your return.
  5. Retirement

    Avoid the Social Security Tax Trap

    Government benefits can cost you big money! Know the income thresholds before you file.
  6. Retirement

    Not All Retirement Accounts Should Be Tax-Deferred

    It may be better to leave your assets exposed to the tax man when you're saving to retire.
  7. Taxes

    What is Gross Income?

    Gross income is an individual’s total income before taxes and other adjustments are considered.
  8. Taxes

    10 Sources Of Nontaxable Income

    Taxes are often a deterrent from investing and saving. These financial practices will bring you no tax grief.
  9. Financial Advisor

    Tips for Tax-Efficient Retirement Plan Withdrawals

    Here's how advisors can help increase tax efficiency for clients who are withdrawing assets from retirement accounts.
  10. Taxes

    Understanding How Dividends Are Taxed

    Learn how dividends are taxed by the IRS, and understand the different types of dividend income as well as the capital gains tax rates.
Frequently Asked Questions
  1. Depreciation Can Shield Taxes, Bolster Cash Flow

    Depreciation can be used as a tax-deductible expense to reduce tax costs, bolstering cash flow
  2. What schools did Warren Buffett attend on his way to getting his science and economics degrees?

    Learn how Warren Buffett became so successful through his attendance at multiple prestigious schools and his real-world experiences.
  3. How many attempts at each CFA exam is a candidate permitted?

    The CFA Institute allows an individual an unlimited amount of attempts at each examination.Although you can attempt the examination ...
  4. What's the average salary of a market research analyst?

    Learn about average stock market analyst salaries in the U.S. and different factors that affect salaries and overall levels ...
Trading Center