An Example of Income in Respect to a Decedent (IRD)for

question 19

Multiple Choice

An example of income in respect to a decedent (IRD) for a cash method of accounting taxpayer is

• A)interest earned but not received prior to death.
• B)salary earned but not received prior to death.
• C)gain from an installment sale entered into before death.
• D)All of the above are examples.

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Definitions:

Equipment Sale

The process of selling off business-owned equipment, either to upgrade to newer assets or to liquidate assets for cash.

Cash Dividend

A payment made by a company out of its earnings to its shareholders in cash.

Financing Activities

Transactions that involve raising funds to finance the company's operations and repaying debt; part of a firm's financial operations detailed on the statement of cash flows.

Principal Repayment

The portion of a loan payment that goes toward reducing the original amount borrowed, not including interest.