Short answer

It depends on the type of federal return and the estate’s income and value. Generally:

• If the estate has gross income of $600 or more in a tax year after the decedent’s date of death, the estate must file Form 1041 (U.S. Income Tax Return for Estates and Trusts).
• If the decedent’s gross estate (plus certain adjustments) exceeds the federal estate tax filing threshold in effect for the year of death, the estate must file Form 706 (United States Estate (and Generation-Skipping Transfer) Tax Return).
• The decedent’s final individual Form 1040 must also be filed for the year of death to report income earned up to the date of death.

Detailed answer — what triggers Form 1041 (federal fiduciary income tax)

Form 1041 reports income the estate receives after the decedent’s death. The IRS requires a fiduciary (executor, administrator, or personal representative) to file a Form 1041 if any of the following apply for the estate’s tax year:

• The estate has gross income of $600 or more.
• A beneficiary who is a nonresident alien received any portion of the estate’s income.
• The estate has any taxable income even if distributions are not made.

“Gross income” includes interest, dividends, rental income, business income, capital gains, and other income the estate receives after the date of death. If the estate retains assets in bank or brokerage accounts and those assets produce interest, dividends, or realized gains, that income counts toward the $600 threshold even when no distributions are made.

Source: IRS guidance for Form 1041 (see About Form 1041).

More information: https://www.irs.gov/forms-pubs/about-form-1041

Detailed answer — when Form 706 (federal estate tax) is required

Form 706 is different: it reports the value of the decedent’s gross estate for federal estate tax purposes. You must file Form 706 if the gross estate (plus certain adjustments and prior gifts) exceeds the federal filing threshold for the year of death. Whether that threshold applies depends on federal law for the year of death. If the estate’s gross value is below that exemption amount, no federal estate tax is due and Form 706 usually is not required.

Because the exemption amount and rules can change annually, check the IRS guidance for the correct filing threshold and detailed instructions for Form 706.

More information: https://www.irs.gov/forms-pubs/about-form-706

Final individual return and interaction with estate returns

The decedent’s final Form 1040 (or Form 1040-SR) reports income earned up to the date of death. Income earned after death belongs to the estate and may require Form 1041. If the estate distributes income to beneficiaries in the same tax year, the income may flow through to beneficiaries, who report it on their individual returns. If the estate retains the income, the estate’s fiduciary must determine whether Form 1041 filing is necessary under the $600 rule.

See IRS Publication 559 for how to handle the decedent’s final return and estate income: https://www.irs.gov/forms-pubs/about-publication-559

Administrative steps for executors in Idaho

Practical steps an executor or personal representative should take:

• Obtain an Employer Identification Number (EIN) for the estate from the IRS (you will need this to file Form 1041 and to open or manage estate bank accounts): https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.
• Inventory all accounts and assets and track income generated after death (interest, dividends, rents, business receipts, and realized gains).
• Decide whether to distribute income to beneficiaries or retain it in the estate. If you distribute, prepare Schedule K-1s to beneficiaries who must report their share on personal returns. If you retain, track that income for Form 1041 purposes.
• File for extensions if needed. Form 1041 generally is due by the 15th day of the fourth month after the estate’s tax year ends (for calendar-year estates, that is April 15). Use IRS Form 7004 to request an extension.

Note on Idaho state taxes: Idaho does not impose a separate state estate tax, but the estate may need to file Idaho income or fiduciary returns if the estate earns income subject to Idaho income tax. For Idaho probate rules and statutory guidance see Idaho Code Title 15 (Probate and Probate Procedure): https://legislature.idaho.gov/statutesrules/idstat/Title15/.

Hypothetical examples to illustrate

Example 1 — no distributions, taxable income under $600: The estate holds a checking account that earns $120 of interest in the year after death and receives no other income. The estate’s gross income is less than $600. No Form 1041 is required. The executor still must keep records and report final Form 1040 for the decedent.

Example 2 — no distributions, taxable income over $600: The estate holds brokerage accounts that paid dividends of $1,200 in the year after death and realized no capital gains. The estate has gross income over $600 and must file Form 1041, even though the executor made no distributions to beneficiaries.

Example 3 — large estate value: The estate’s assets total several million dollars. If the gross estate value (plus adjustments) exceeds the federal filing threshold for the year of death, the executor must prepare and file Form 706 whether or not distributions were made.

Helpful hints

• Keep detailed records of all post-death income, expenses, and distributions. Good records make tax filing much easier.
• Obtain an EIN for the estate early. Do not use the decedent’s Social Security number for estate activities after death.
• If estate income is close to $600, err on the side of preparing a return or consulting a tax professional to avoid penalties.
• Use IRS Publication 559 and the Form 1041 instructions as authoritative guides for reporting rules: https://www.irs.gov/forms-pubs/about-publication-559 and https://www.irs.gov/forms-pubs/about-form-1041.
• Check the current federal estate tax exemption and Form 706 instructions for the year of death before assuming no federal estate tax return is required: https://www.irs.gov/forms-pubs/about-form-706.
• Discuss complex situations (business ownership, foreign beneficiaries, rental properties, trusts tied to the estate) with a qualified tax professional or attorney familiar with Idaho probate practice.