Final answer:
Estates that earn income must indeed file both an estate tax return and an income tax return, with the estate tax applying only to estates worth more than $12.06 million as of 2022.
Step-by-step explanation:
The statement regarding estates that earn income needing to file both an estate tax return and an income tax return is true. The United States tax code mandates that estates, which are considered separate legal entities, must file an estate tax return if the value of the estate is over a certain threshold. As of 2022, the estate tax applies to estates worth more than $12.06 million.
If an estate generates income, it is also responsible for filing an income tax return, just like an individual or a business entity. This is separate from the estate tax, which is levied on the transfer of the estate's assets upon the death of the individual. It's crucial to differentiate between these two types of taxes and the circumstances under which they must be filed.