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Income In Respect Of A Decedent - Introduction

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
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