1116.1 When income is generated by a business that is part of an estate, who receives the income?
When a business is part of an estate that is being administered, the income from the business is income of the estate and not of the heirs. This is true even if one or more of the heirs does the actual work and keeps the proceeds, and even if the heir is the administrator of the estate. However, this work may be a separate trade or business.
1116.2 When pay is received for running a business that is part of an estate, how is it classified?
If you receive pay designated specifically from running the business (as distinguished from an amount received as a distribution of estate assets to an heir), it counts as earnings from self-employment. (See also §1114 for rules where the administrator runs the business.)