Income in respect of a cash-basis decedent
a. Covers income earned and collected after a decedent's death.
b. Receives a stepped-up basis in the decedent's estate.
c. Includes a bonus earned before the taxpayer's death but not collected until after death.
d. Must be included in the decedent's final income tax return.
Answer: C
Tax
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- Ed and Ann Ross were divorced in January of the current year. In accordance with the divorce decree, Ed transferred the title in their home to Ann. The home, which had a fair market value of $150,000, was subject to a $50,000 mortgage that had twenty more years to run. Monthly mortgage payments amount to $1,000. Under the terms of settlement, Ed is obligated to make the mortgage payments on the home for the full remaining twenty-year term of the indebtedness, regardless of how long Ann lives. Ed made twelve mortgage payments during the current year. What amount is taxable as alimony in Ann's current year return?
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