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. Trading Strategies

    Adjust Market Strategies To Elevated Risk

  2. Fundamental Analysis

    How to Create a Personal Risk Management Plan

  3. Investing Basics

    Want to Beat the Market? Take on Some Risk

  4. Trading Strategies

    Three Types Of Profit Protection Stops

  5. Professionals

    Worried About Stocks? Try on Convertibles

RELATED TERMS
  1. Net Line

    The amount of risk that an insurance company retains after subtracting ...
  2. Political Risk Insurance

    Coverage that provides financial protection to investors, financial ...
  3. Maximum Drawdown (MDD)

    The maximum loss from a peak to a trough of a portfolio, before ...
  4. Gross Exposure

    The absolute level of a fund's investments.
  5. Priori Loss Estimates

    A technique used by insurance companies to calculate loss reserves.
  6. Value Of Risk (VOR)

    The financial benefit that a risk-taking activity will bring ...

RELATED FAQS

  1. Does index trading increase market vulnerability?

    Learn how the rise in popularity of passive ETFs and mutual funds tracking indexes has increased the correlation among stocks, ...
  2. What are common delta hedging strategies?

    Learn about common delta hedging strategies, including how to make a position in options delta neutral by offsetting risk ...
  3. How does being overweight in a particular sector increase risk to a portfolio?

    Learn about the risks of having a portfolio that is overweight in a particular sector and how investors should regularly ...
  4. What are the primary risks an investor should consider when investing in the retail ...

    Learn about the primary risks of investing in the retail sector, such as bad economic conditions, regulation, competition ...

You May Also Like

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!