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. 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.
  2. Trading

    The ABCs Of Option Volatility

    The mystery of options pricing can often be explained by a look at implied volatility (IV).
  3. Taxes

    Which Countries Have the Highest Taxes on High Incomes?

    These countries charge the highest taxes on high incomes.
  4. Personal Finance

    All About Income

    Income is the money you or a business earns by providing goods or services, or through investments.
  5. Financial Advisor

    How Life Insurance Can Help Reduce Estate Taxes

    Inheritance is a double-edged sword, as leaving money can create estate tax burdens. Opting for a life insurance plan can help mitigate those burdens.
  6. Taxes

    Explaining Taxable Income

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

    Countries with the Highest Income Taxes

    Before you move to one of these countries with the highest income taxes, think through the overall tax situation - and what you get for your money.
Frequently Asked Questions
  1. What is the difference between comparative advantage and absolute advantage?

    Whereas absolute advantage refers to the superior production capabilities of one nation versus another, comparative advantage ...
  2. What Factors Cause Shifts in Aggregate Demand?

    Find out how aggregate demand is calculated in macroeconomic models. See what kinds of factors can cause the aggregate demand ...
  3. What is the difference between an income statement and a balance sheet?

    The balance sheet illustrates a company’s book value, and the income statement shows how assets and liabilities are used.
  4. What is the Difference Between a Forward Rate and a Spot Rate?

    The forward rate is the settlement price of a forward contract, while the spot rate is the settlement price of a spot contract.
Trading Center