An estate may be required to file an income tax return for the income and deduction received during the period of administration. The form is IRS Form 1041. An estate can elect a fiscal year. Thus, if a person dies on March 10th of a given year, the fiscal year for the estate is March 10th through February 28th of the next year. If income is received and the estate is not closed by the end of the period, then the estate pays income tax on the income earned. If the estate is closed by the end of the period, any income or deductions are passed through to the beneficiaries who inherited the estate. Thus, if there was a dividend check of $2,000 received by the estate and there were two beneficiaries, each would include $1,000 in dividends on their Form 1040 in the year the estate closes.