Income in respect of a decedent (IRD) is income generated by an individual that is not realized until after his or her death. IRD does not get a stepped-up basis as do most other assets, so a beneficiary must pay income tax on IRD income. IRD does not receive a step-up in basis because the income was not yet taxed on the decedent's individual income tax return.

An example of IRD would be salary the decedent had earned but had not received at the time of his or her death. Other examples are outstanding income owed to a self-employed decedent, partnership income attributable to a period before the decedent's death, deferred compensation, and unpaid dividends, rents, and royalties owed to the decedent.

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