I don't need to read your answer again, I know what you're saying and am not an idiot. Your statement stands in complete contrast to what I've been told by two different tax professionals, who have been clear that I shouldn't owe taxes on IRD if the decedent wouldn't have owed taxes on that same income. No different than regular inheritance, which is what this payment would have been had she died one day later. If you disagree with that, then it sounds like I've got an entire other issue I need to nail down.
