Income In Respect Of A Decedent - Sample Questions 1 - 3

1. Items which could be considered "income in respect of a decedent" (IRD) include which of the following?

I. Installment sale payments
II. IRA distributions not yet taken
III. Rental income not collected
IV. Annuity lottery winnings

A) I and II only
B)
III and IV only
C)
I, III and IV only
D) I, II, III and IV


2. Which of the following are TRUE statements concerning IRD income?

I. The IRD is not included in the gross estate if the property is passed under the marital deduction.
II. IRD income is tax-exempt if received six or more months after death.
III. The IRD recipient may be able to take a tax deduction on their individual tax return if the estate tax return already paid taxes on the income.
IV. IRD income is included in the gross estate of the decedent if possible.

A) I and II only
B)
III and IV only
C)
II, III and IV only
D) All of the above

3. What happens to IRD income after the estate tax return and the decedent's final income tax returns have been filed?

A) After six months the income is tax-exempt.
B)
The spouse is required to file a gift tax return for the income until it stops.
C)
The beneficiary of the income must include it on their individual tax return.
D) The executor files the income on an annual income tax return of the decedent, Form 2706 until the income creases to be paid.


Answer Key


Related Articles
  1. Options & Futures

    Option Volatility: Predicting Big Price Moves

    By John Summa, CTA, PhD, Founder of OptionsNerd.comImplied volatility levels were shown previously to move inversely to the price of most big cap stocks and options on major market averages. ...
  2. Taxes

    Taxes: Who Pays And How Much?

    When it comes to taxes, the debate is endless on who pays what, especially in Congress. With no new initiatives in sight, let's take a look at who is paying now.
  3. Taxes

    Top Tax Issues For High-Net-Worth Individuals

    Wealth brings benefits, but from a tax perspective it creates special challenges. Here are some tax issues to pay attention to.
  4. Taxes

    3 Common Tax Questions Answered

    We clarify some rules that often puzzle taxpayers.
  5. Taxes

    Explaining Taxable Income

    Taxable income is the net of gross income and allowable deductions.
  6. Economics

    Comparing Regressive, Proportional and Progressive Taxes

    Learn about the basic differences between three common tax systems.
  7. Retirement

    Top Tax Tips For Retirees

    Filing your taxes during retirement can be just as time consuming as when you were employed. We have some tips to help you out.
  8. Personal Finance

    What's a Marginal Tax Rate?

    The marginal tax rate is based on a progressive tax system, where tax rates for an individual will increase as income rises. This method of taxation aims to fairly tax individuals based upon ...
  9. Taxes

    How Much Tax Do You Really Pay?

    When you add direct and indirect taxes together, your real tax rate is much more than you expected.
  10. Taxes

    Next Season, File Taxes On Your Own

    Master these fundamentals and you'll be doing your own taxes with minimal stress.
RELATED TERMS
  1. Income In Respect Of A Decedent ...

    Money that was due to a decedent and will pass through to the ...
  2. Decedent (IRD) Deduction

    The decedent or IRD deduction stands for Income in Respect of ...
  3. Final Return For Decedent

    The final tax return filed for an individual in the year of that ...
  4. Future Income Tax

    Income tax that is deferred because of discrepancies between ...
  5. IRS Publication 559: Survivors, ...

    A document published by the Internal Revenue Service (IRS) that ...
  6. Decedent

    A person who is no longer living. Just as a taxpayer's possessions ...
RELATED FAQS
  1. Under the Uniform Securities Act, which of the following are defined as securities ...

    The correct answer is a. Fixed annuities are not considered securities, since the purchaser bears no investment risk. However, ... Read Answer >>
  2. Which of the following statements is (are) true with respect to setting the proper ...

    The correct answer is: d) Choice II is incorrect because the longer the investment horizon, the less emphasis must be placed ... Read Answer >>
  3. Which of the following are not types of open-end management investment companies ...

    The correct answer is d) Hedge funds are extremely aggressive entities that engage in margin and short-selling.  They are ... Read Answer >>
  4. Which statements about common shareholder rights are FALSE? I. A shareholder may ...

    The correct answer is a. I should be the the other way around: convertible bond holders can exchange their bonds for shares. ... Read Answer >>
  5. Which of the following are tools that are employed by the Federal Reserve in its ...

    I. Moral suasionII. Changing the discount rateIII. Changing the reserve requirementIV. Changing the prime interest rate A. ... Read Answer >>
  6. Under the Telephone Consumer Act of 1991, a telemarketer must provide which of the ...

    The correct answer is d. All the choices except II are specific requirements of the Act. In addition, the law places time-of-day ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center