How should unreceived income be reported on the final personal return of a deceased client?

The correct reporting of unreceived income on the final personal return of a deceased client is important in ensuring compliance with tax laws and regulations. When preparing the final personal return for a deceased individual, all income that the individual earned up until the date of death must be reported, which includes unreceived income that the individual was entitled to.

In this context, referring to the return specifically as Bob's final personal return accurately reflects that it is the last return to be filed on behalf of Bob, addressing his tax obligations for the income earned prior to his death. This may include items such as wages, dividends, and other earnings that were not yet received but were legally owed to him.

Reporting unreceived income directly on Bob’s final return helps clarify the income sources he had prior to passing and ensures that all tax liabilities are accounted for in a clear and concise manner. It also simplifies the accounting process for the estate by clearly delineating what was owed to Bob at the time of his death.

This approach aligns with the tax rules that govern the treatment of a deceased individual's income on their last tax return to ensure compliance and proper reporting.