Is income in respect of a decedent included in gross income?

Income in respect of a decedent refers to income that the decedent was entitled to receive before their death but was not actually received until after their passing. This income is included in the gross income of the decedent's estate or the beneficiaries receiving it. Therefore, when considering tax implications, it is essential to recognize that this income is taxable. The inclusion of such income is grounded in the principle that it reflects the decedent's economic rights and obligations, irrespective of the timing of the actual receipt of the income.

This provision ensures that the tax system captures income that might otherwise escape taxation simply due to the timing of death, thus mantaining fairness in the tax treatment of income. The other options suggest limitations or exclusions that do not apply to this type of income in respect of a decedent, as it is clearly stated in the tax laws that all such income must be reported and is taxable.