Get PA REV-485 2019-2024

Inheritances are not considered income for federal tax purposes, whether you inherit cash, investments or property. However, any subsequent earnings on the inherited assets are taxable, unless it comes from a tax-free source.

There are exceptions and assets not subject to Pennsylvania inheritance tax. Life Insurance. ... Property Owned Jointly between Spouses. ... Real Estate Owned as Tenants by the Entireties. ... Inheritance from Predeceased Spouse. ... Assets Passing from Deceased Child to Parent. ... Assets Passing from Parent to Child 21 or Younger.

Property owned jointly between husband and wife is exempt from inheritance tax, while property inherited from a spouse, or from a child aged 21 or younger by a parent, is taxed a rate of 0%. Inheritance tax returns are due nine calendar months after a person's death.

Tangible personal property and unsold real estate located outside of Pennsylvania titled to the individual name of the decedent is not subject to Pennsylvania inheritance tax.

The Pennsylvania inheritance tax is a tax on the total assets owned by a decedent at the time of his or her death. In most small estates, the only asset subject to inheritance tax is the property.

There are practical ways to minimize or avoid PA inheritance tax without needing to move to a state without estate tax or inheritance tax. #1 - Gifting. Either to individuals, charities, or irrevocable trusts. #2 - Buying real property in a state without estate or inheritance tax.

Examples of some deductions are estimated funeral costs, probate filing fees (how much was paid to get Letters of Administration/Letters Testamentary), and the decedent's debts at the time of his or her death (such as delinquent real estate taxes or mortgage).

An inheritance tax return must be filed for every decedent (or person who died) with property that may be subject to PA inheritance tax. The tax is due within nine months of the decedent's death.