Legal Definitions - income in respect of decedent

Income in respect of decedent, also known as "IRD," refers to any income that a person who has passed away would have received if they were still alive. This income can come from various sources, such as:

• Unpaid salary or wages
• Unpaid bonuses or commissions
• Unpaid rent or royalties
• Unpaid dividends or interest

For example, if a salesperson earned a commission but passed away before receiving it, that commission would be considered IRD. Depending on who receives the income, the IRD would need to be reported differently:

• If the IRD is paid to the deceased person's estate, then it must be included on the fiduciary return.
• If the IRD is paid directly to a beneficiary, then the beneficiary must include it in their tax return.

Overall, IRD is any income that a deceased person would have received if they were still alive, and it must be reported and taxed accordingly.