26 CFR §1.691(a)-2

1. (a)Under section 691(a)(1), income in respect of a decedent shall be included in the gross income, for the taxable year when received, of:
   1. (1)The estate of the decedent, if the right to receive the amount is acquired by the decedent's estate from the decedent;
   2. (2)The person who, by reason of the death of the decedent, acquires the right to receive the amount, if the right to receive the amount is not acquired by the decedent's estate from the decedent; or
   3. (3)The person who acquires from the decedent the right to receive the amount by bequest, devise, or inheritance, if the amount is received after a distribution by the decedent's estate of such right.
2. (b)The application of paragraph (a) of this section may be illustrated by the following examples, in each of which it is assumed that the decedent kept his books by use of the cash receipts and disbursements method.