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Income in Respect of a Decedent: Mastering Sec. 691 IRD Calculations, Reporting and Planning Strategies

Preserving Deductions and Minimizing the Tax Impact of IRD Through Transfers and Conversions

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Wednesday, August 31, 2016

Recorded event now available

This course will provide tax professionals with a deep and comprehensive examination of the IRC Section 691 Income in Respect of Decedents (IRD) rules. I will discuss what types of income must be included in IRD, including how to allocate receivables to IRD, and avoiding double-tax on IRD by appropriately allocating deductions under Section 691(c). I will also address the interrelation between the taxable estate and IRD calculations, focusing on tax minimization planning techniques.

Description

One of the most significant challenges for tax advisers of estates and their beneficiaries is navigating the rules governing IRD. Defined in only in Code Section 691 and its regulations, the concept of IRD permeates most aspects of estates and beneficiary tax reporting, and tax advisers need to be able to correctly calculate and report IRD and identify planning opportunities available to beneficiaries.

Section 691 provides that items of income earned or accrued during the life of the decedent but not received until after death must be claimed by both the estate and its beneficiaries. The estate may claim a deduction for the taxes due on the IRD; this presents a challenge in tracking and allocating the IRD when the estate tax return and the beneficiaries’ returns are prepared by different advisers.

In addition to ensuring that the Section 691 IRD deduction is properly allocated, tax advisers need to understand the planning opportunities available to minimize the overall tax impact of IRD on the estate’s beneficiaries. Strategies such as “deathbed Roth conversions” and transfer of IRD rights can lower the tax impact on beneficiaries if properly structured.

Listen as our experienced panelist provides a detailed and practical guide to calculating and reporting IRD, as well as navigating the planning opportunities available to affected taxpayers.

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Outline

  1. Statutory definitions of IRD
  2. Calculations and allocations of IRD
  3. Special considerations (receivables, etc.)
  4. Planning opportunities through transfer of IRD rights
  5. Reporting mechanics and challenges
  6. Section 691(c) deductions in respect of a decedent

Benefits

The panelist will discuss these and other important topics:

  • Determining amount and character of IRD under Section 691
  • Timing issues in reporting IRD
  • Planning opportunities through transfer or rights to receive IRD
  • Calculating the Section 691 IRD deduction from the decedent’s estate

Faculty

Monica Haven, E.A., J.D., LLM
Monica Haven, E.A., J.D., LLM
Founder

Monica Haven, E.A., J.D. has a Masters in Taxation (LL.M.) and is also a graduate fellow and former faculty member of...  |  Read More