Estates are entities that report income after an individual person has died. If the person, for example, earns interest, dividends, or capital gains after his or her death, then that income is consider income for his or her estate, and the income must be reported on a separate and specific U.S. Income Tax form for Estates and Trusts. Estates may also have to pay tax on the total value of it’s assets. A tax on the value of the estate is reported on Form 706, U.S. Estate Tax Return. The estate tax is a tax on assets, whereas the estate income tax is a tax on income.