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Bequest: Taxes After a Death (2025 IRS Guide)

This guide covers “Bequest” within taxes after a death. The following material presents the IRS treatment of this topic, including the qualifications, exceptions, and examples in the source section. Read the rules alongside the facts of your own situation before deciding what to report, deduct, or document.

Adapted from Publication 559 (2025), Survivors, Executors, and Administrators, published by the Internal Revenue Service. This guide retains the source edition’s years, amounts, deadlines, and examples. It is guidance for that edition, not a statement that the same figures apply to every tax year.

Context for these rules

If you are the beneficiary of an estate that is required to distribute all its income currently, you must report your share of the distributable net income, whether or not you have actually received the distribution.

If you are a beneficiary of an estate that isn't required to distribute all its income currently, you must report all income that is required to be distributed to you currently (whether or not actually distributed), plus all other amounts paid, credited, or required to be distributed to you, up to your share of distributable net income. As explained earlier under Income Distribution Deduction, for an amount to be income required to be distributed currently, there must be a specific requirement for current distribution either under local law or the terms of the decedent's will. If there is no such requirement, the income is reportable only when distributed.

If the estate has more than one beneficiary, the separate shares rule discussed earlier under Income Distribution Deduction may have to be used to determine the distributable net income allocable to each beneficiary. The beneficiaries in the examples shown next don't meet the requirements of the separate shares rule.

Bequest

A bequest is the act of giving or leaving property to another through the last will and testament. Generally, any distribution of income (or property in kind) to a beneficiary is an allowable deduction to the estate and is includible in the beneficiary's gross income to the extent of the estate's distributable net income. However, a distribution won't be an allowable deduction to the estate and won't be includible in the beneficiary's gross income if the distribution meets all the following requirements.

  • It is required by the terms of the will.

  • It is a gift or bequest of a specific sum of money or property.

  • It is paid out in three or fewer installments under the terms of the will.

Specific sum of money or property.

To meet this test, the amount of money or the identity of the specific property must be determinable under the decedent's will as of the date of death. To qualify as specific property, the property must be identifiable both as to its kind and its amount.

Example 1.

D. Rogers’ will provided that D. Rogers’ child, Taylor, receive D. Rogers’ interest in the Rogers-Jones partnership. D. Rogers’ other child, Angel, would receive a sum of money equal to the value of the partnership interest given to Taylor. The bequest to Taylor is a gift of a specific property ascertainable at the date of D. Rogers’ death. The bequest of a specific sum of money to Angel is determinable on the same date.

Example 2.

M. Jenkins’ will provided that the surviving spouse, Riley, would receive money or property to be selected by the personal representative equal in value to half of M. Jenkins’ adjusted gross estate. The identity of the property and the money in the bequest are dependent on the personal representative's discretion and the payment of administration expenses and other charges, which aren't determinable at the date of M. Jenkins’ death. As a result, the provision isn't a bequest of a specific sum of money or of specific property, and any distribution under that provision is a deduction for the estate and income to the beneficiary (to the extent of the estate's distributable net income). The fact that the bequest will be specific sometime before distribution is immaterial. It isn't ascertainable by the terms of the will as of the date of death.

Distributions not treated as bequests.

The following distributions aren't bequests that meet all the requirements listed earlier that allow a distribution to be excluded from the beneficiary's income and don't allow it as a deduction to the estate.

Paid only from income.

An amount that can be paid only from current or prior income of the estate doesn't qualify even if it is specific in amount and there is no provision for installment payments.

Annuity.

An annuity or a payment of money or of specific property in lieu of, or having the effect of, an annuity isn't the payment of specific property or a sum of money.

Residuary estate.

If the will provides for the payment of the balance or residue of the estate to a beneficiary of the estate after all expenses and other specific legacies or bequests, that residuary bequest isn't a payment of specific property or a sum of money.

Gifts made in installments.

Even if the gift or bequest is made in a lump sum or in three or fewer installments, it won't qualify as specific property or a sum of money if the will provides that the amount must be paid in more than three installments.

Conditional bequests.

A bequest of specific property or a sum of money that may otherwise be excluded from the beneficiary's gross income won't lose the exclusion solely because the payment is subject to a condition.

Installment payments.

Certain rules apply in determining whether a bequest of specific property or a sum of money has to be paid or credited to a beneficiary in more than three installments.

Personal items.

Don't take into account bequests of articles for personal use, such as personal and household effects and automobiles.

Real property.

Don't take into account specifically designated real property, the title to which passes under local law directly to the beneficiary.

Other property.

All other bequests under the decedent's will for which no time of payment or crediting is specified and that are to be paid or credited in the ordinary course of administration of the estate are considered as required to be paid or credited in a single installment. Also, all bequests payable at any one specified time under the terms of the will are treated as a single installment.

Testamentary trust.

In determining the number of installments that must be paid or credited to a beneficiary, the decedent's estate and a testamentary trust created by the decedent's will are treated as separate entities. Amounts paid or credited by the estate and by the trust are counted separately.

Using the guidance

Keep the documents that establish the dates, amounts, and circumstances described above. References to other chapters, forms, worksheets, or earlier and later sections refer to the linked IRS publication. Check the full publication and its updates before relying on a rule for a different tax year or a situation not addressed here.

Sources and further reading

The cited U.S. government text is in the public domain. Source accessed October 28, 2026. Fynoptic has organized this material for educational use and is independent of, and not endorsed by, the IRS.

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