Income in Respect of a Decedent (Portfolio 862)
This Portfolio discusses the scheme for taxing “income in respect of a decedent” (IRD).
Tax Portfolio, Income in Respect of a Decedent, No. 862, discusses the scheme for taxing “income in respect of a decedent” (IRD). The IRD scheme is intended to eliminate, as much as possible, the consequences of death on the operation of the income tax laws. It accomplishes this goal largely by preventing the basis step-up rule from operating on a decedent’s receivables in situations where income tax forgiveness would be inappropriate. IRD has been defined as the amounts to which the decedent was entitled as gross income.
IRD generally is taxed to the decedent’s estate or to the beneficiary acquiring the right to receive the amount. One of the most difficult questions in the area of IRD is determining which receivables are subject to IRD treatment. This Portfolio, which has a detailed discussion on receivables, is helpful in answering this question.
This Portfolio also contains a detailed discussion and analysis of the federal estate and income tax computations that arise in connection with items of IRD. Specific analysis is provided on the following areas: determining the taxable recipient and the time, character, and amount of taxable IRD; deductions in respect of a decedent; the income tax deduction for federal estate tax; and planning techniques.
This Portfolio may be cited as Acker, 862 T.M., Income in Respect of a Decedent.
Table of Contents
I. Underlying Concept
II. Purpose and Development of IRD Scheme
III. Identifying Items of IRD
IV. Determining the Taxable Recipient and the Time, Character, and Amount of IRD
V. Deductions in Respect of a Decedent
VI. Deduction for Federal Estate Tax – § 691(c)
VII. Particular Receivables as Constituting IRD Receivables
VIII. Open Issues
IX. Planning for IRD
Carlile Patchen & Murphy LLP