Deceased taxpayer Dec. 2004

[Skeemo]

Husband died December 2004. Employer paid unused vacation sick pay etc in early 2005 and reported it on a W2 in his name and SSN. The wife is not eligible to file a joint return for 2005. How should his W2 income be handled? Reported on her return? File a Form 706 for him? Other?
Thanks

[rosieea]

It's called income in respect of a decedent (IRD). See pages 21-6 and 21-27 in the Tax Book.

[Skeemo]

Taxpayer deceased December 2004

Yes, I had read these, but am still confused. Apparently income should have been reported by employer on a 1099 instead of a W2, but they used a W2. Would you include this on the surviving spouse's return as IRD or seperately on a 1041?

[Bees Knees]

No, his 2005 income does not belong on his surviving spouse's return. That is what IRD means. It is his income that does not belong on a 1040. Regardless of how the employer reports the income, IRD is always reported on the 1041 and the 706.

[Unregistered]

Doesn't that contradict the instructions in Publication 393 that tell payors to use a Form 1099-Misc if payment is made after the year of death to either the estate or a BENEFICIARY?