Income in respect of decedent or “IRD” refers to any income a deceased person would have received, had they lived. For example, when a salesperson earns a commission, and dies before the commission is paid.
Depending on who receives the income, the IRD would need to be reported differently. If the IRD is paid to the estate, then it must be included on the fiduciary return. However, if the IRD is paid directly to a beneficiary, then the beneficiary must include it in their tax return. See 26 CFR § 1.753-1
[Last updated in April of 2022 by the Wex Definitions Team]