Inheritance Tax and Estate Tax

Pittsburgh Estate Taxes Lawyer

When you die and leave property to someone, your estate will be taxed on the amount that you pass on. Whether you've left money, jewelry, cars, or real estate, both the Federal and Pennsylvania authorities will assess a tax.

Pennsylvania Inheritance Tax

Pennsylvania taxes its residents for any property they pass on upon their death. Additionally, even for out-of-state residents, any real estate located in Pennsylvania will be subject to inheritance tax. Under current law, the tax rates vary depending on who receives the property. If property is left to a spouse, there will be no tax due. For children and grandchildren, the rate increases to four and a half percent. For siblings, nieces and nephews of the deceased, the rate increases again to twelve percent. For any everyone else, such as unmarried partners, domestic partners, friends, and acquaintances the rate is set at fifteen percent. Without proper planning, the inheritance tax bill incurred by an estate can get very high. Pennsylvania inheritance tax is, for residents and real property owners, inevitable.

Federal Estate and Gift Tax

Federal Estate and Gift Tax has been revised countless times over the years. Today, only the very wealthy are subject to Federal Estate and Gift Tax. In 2014, a single person can pass on up to $5.34 million at their death (in 2015 it is $5.43 million), or as part of lifetime gifts, without being subject to Federal Estate Tax. A married couple can pass on double without being subject to tax. Once that exemption limit is hit, however, the tax rates are high. In fact in 2014 and 2015, the rate is 40%. While most people today are not subject to Federal Estate and Gift Tax, failure to plan properly can result in huge tax consequences for the unsuspecting decedent's estate.

Consideration of estate and inheritance taxes is a key component of all estate plans. Additionally, an estate is not properly administered unless all necessary inheritance and estate tax returns have been completed and filed. If you need to discuss the tax implications of your estate, or if you are an executor and would like to learn more about Pennsylvania inheritance taxes, contact the experienced Pittsburgh Estate Administration attorneys at McMorrow Law, LLC at 724-940-0100 or 412-407-2816 for a free consultation.