Estates must file a Form 1041 

• Estates must file a From 1041 if they have gross income $600 or more.
• The day after death is the beginning of the first tax year.  The first year can cover any period of 12 months or less that ends on the last day of the month.  The executor of the estate chooses a tax year when the first fiduciary return is filed.
• The return must be filed by the 15th day of the fourth month following the close of the tax year.

A personal representative files Form 706

In 2010, a 706 return is required if the gross estate (valued on date of death), plus taxable lifetime gifts and specific exemptions, is more than $3,500,000.  A Form 706 must be filed even if no federal estate tax will be owed after the deductions and tax credits are taken.  Some estates that aren’t required to file a Form 706 should still consider filing one as a way to record the date of death fair market value of the estate assets.

• The return must be filed within 9 months after the decedent’s date of death.  If the personal representative cannot gather the necessary information in time, an automatic 6-month extension can be filed.