Legal Definitions - income in respect of a decedent

Definition: Income in respect of a decedent refers to the income earned by a person but not collected before their death. This income is included in the decedent's gross estate for estate-tax purposes. For income-tax purposes, it is taxed to the estate or, if the estate does not collect the income, it is taxed to the eventual recipient.

Example: If a person earned money from work before their death but did not receive it, that money is considered income in respect of a decedent. For example, if a person earned $1,000 in November but did not receive the payment until January, after their death, that $1,000 is considered income in respect of a decedent. This income is taxed to the estate or the eventual recipient.

Explanation: Income in respect of a decedent is income that was earned by a person but not collected before their death. This income is taxed differently for estate-tax and income-tax purposes. For estate-tax purposes, it is included in the decedent's gross estate. For income-tax purposes, it is taxed to the estate or the eventual recipient. The example illustrates how income in respect of a decedent works in practice.