Simple English definitions for legal terms
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Income in respect of decedent: This means any money that a person who has died would have received if they were still alive. For example, if a salesperson earned a commission but died before they could get paid, that commission would be considered income in respect of decedent. Depending on who gets the money, it may need to be reported on different tax forms. If the money goes to the person's estate, it goes on the fiduciary return. If it goes directly to a beneficiary, the beneficiary has to report it on their tax return.
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:
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:
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.