What is income in respect of a decedent (IRD)?

The definition in plain terms

Think of IRD as money that was already earned but arrives too late for the person's final tax return. The IRS definition in Publication 559 is broad: all income the decedent would have received had death not occurred that was not properly includible on the final return. That wording means the answer depends on the accounting method the person used, because the method decides what belongs on the final return in the first place. A cash method person reports what was actually or constructively received before death, so earned but unpaid amounts are IRD. An accrual method person reports what accrued before death, so most earned items are already on the final return and are not IRD.

Use the checker above to see how a single item would be treated for a cash or accrual method decedent.

Who reports it

IRD must be included in the income of one of three people. The first is the decedent's estate, if the estate receives it. The second is the beneficiary, if the right to the income passes directly to the beneficiary and the beneficiary receives it. The third is any person to whom the estate properly distributes the right to receive it. It is never reported on the final return and is not reported twice.

The publication's examples

Publication 559 gives five worked examples. In the first, F. Johnson, a cash method orchard owner, sold 1,000 bushels of apples to a canning factory for $2,000 and died before payment. The estate transferred the right to the surviving spouse, and when the spouse collects the $2,000 it is the spouse's income, not the decedent's final return or the estate's. In the second, the same facts with an accrual method decedent put the $2,000 on the final return, so there is no IRD. In the third, a cash method taxpayer sold a tractor with an adjusted basis of $2,000 for $3,000 payable March 1 and died on February 15. The IRD is the $1,000 gain, the difference between basis and proceeds, which is what the decedent would have realized. In the fourth, a salary payable in five annual installments is entirely IRD; the estate reports the two installments it collected, and the beneficiary reports each of the remaining three as received. The fifth shows renewal commissions passing through several people: each person includes what that person receives.

Character and transfers

The character of IRD stays what it would have been for the decedent. If the income would have been capital gain, it is capital gain to you. If you transfer your right to IRD, you include the greater of the amount you receive or the fair market value of the right. A gift of the right means you include its value at the time of the gift. For installment obligations, the person collecting uses the same gross profit percentage the decedent used. If the obligation is transferred or canceled, including to the obligor, the includible amount is the greater of what you receive or fair market value, reduced by the decedent's basis adjusted for payments received.

Common types of IRD

The publication lists specific kinds. Wages or other pay earned but unpaid at death are IRD, with no reduction for amounts the employer would have withheld; wages paid as IRD are not subject to federal income tax withholding, though they are subject to social security and Medicare withholding if paid in the calendar year of death. For a cash method farmer, rent received as crop shares or livestock still owned at death is IRD when sold. The publication's rental example: a lease paying one third of the crop, with the owner alive for 122 days of the rental period and the crop sold later for $1,500, makes $501 (122/365 of $1,500) IRD and the other $999 income to the estate.

Remaining payments for a partnership interest in liquidation are IRD. Series EE and I savings bond interest earned before death is IRD unless the personal representative elects to put all of it on the final return. Accrued interest on savings certificates up to the date of death is IRD; interest after death is taxable to the recipient but is not IRD. Traditional IRA lump sums are taxable as IRD up to the decedent's taxable balance, which is the balance at death minus any basis from nondeductible contributions. Roth IRA earnings up to the date of death are IRD, but qualified distributions after the five-tax-year period are not taxed. HSA balances going to a non-spouse beneficiary, and Coverdell ESA earnings going to certain beneficiaries, also work through these rules.

The offsetting deduction

IRD is part of the decedent's gross estate, so it can be hit by estate tax and by income tax. To soften that, the recipient may deduct the estate tax paid on the IRD. That deduction is a separate calculation and has its own page. Items such as business expenses, interest and taxes that the decedent owed but that could not be deducted on the final return are deductions in respect of a decedent, and are allowed to the estate or the person who takes the property when they are paid.

Sources

• IRS Publication 559, Survivors, Executors, and Administrators (2025): Income in Respect of a Decedent (How To Report, Specific Types of Income in Respect of a Decedent); Final Income Tax Return for Decedent (Income To Include, Cash Method, Accrual Method); Deductions in Respect of a Decedent. Read November 2, 2026.

Edition read: Publication 559 (2025), for use in preparing 2025 returns. Dollar limits and dates in this publication are for 2025; check the current publication and form instructions for your tax year. This page summarizes the publication and does not replace it.