Income In Respect Of A Decedent - IRD


DEFINITION of 'Income In Respect Of A Decedent - IRD'

Money that was due to a decedent and will pass through to the recipient or estate as income during that tax year. The recipient (beneficiary) must declare the money as income in respect of a decedent (IRD) for any year in which income is received. The estate must also claim the income, but may claim a deduction in the amount of income tax due on the IRD.

BREAKING DOWN 'Income In Respect Of A Decedent - IRD'

While it's more common to deal with assets in an inheritance, the decedent may have had a last paycheck or unpaid commissions in transit at the time of his or her death. These items will never be reported on the decedent's income taxes and will instead be double-taxed by the recipient and the decedent's estate.

  1. Decedent

    A person who is no longer living. Just as a taxpayer's possessions ...
  2. Final Return For Decedent

    The final tax return filed for an individual in the year of that ...
  3. Death Benefit

    The amount on a life insurance policy or pension that is payable ...
  4. Estate Tax

    A tax levied on an heir's inherited portion of an estate if the ...
  5. Irrevocable Trust

    A trust that can't be modified or terminated without the permission ...
  6. Beneficiary

    Anybody who gains an advantage and/or profits from something. ...
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