With the help of our reader, Myer Spector, who supplied the
following documentation for me, you can see that, once money is made from the
sale of property it must be declared as income and taxed accordingly IN
ADDITION TO the death tax.
Furthermore, Mr. Spector received the amounts collected from
the inheritance tax from the PA House Appropriations Committee that for 2013-2014,
PA estimates it received $894.3 MILLION – yes, almost a BILLION in proceeds
from the death tax. When this figured is coupled with the fact that according
to a new study, Pennsylvania is ranked 5th among the MOST corrupt
states in the nation http://thetimes-tribune.com/news/study-pennsylvania-fifth-in-corruption-1.1703090,
it begs the question: How much of these ill-gotten gains are paying for this
corruption?
Also, Mr. Spector received two letters from Tom Corbett the
current Governor of Pennsylvania. In one letter, prior to becoming governor, Tom
Corbett made the campaign promise to repeal the death tax once he became the
Governor of Pennsylvania. The second letter is a status report that explains
what he has been doing OTHER than repealing the death tax.
The following letters and documentation inserted here for your consideration:
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If you would like to contact the Governor regarding this matter, you can message him on Facebook at https://www.facebook.com/Gov.TomCorbett
Let’s Continue the Conversation - What do you think? Please leave your comments below:
Please note that this article was based on the personal experiences of two of our readers. In no way, are these articles intended to give legal advice. If you are in a situation dealing with the death tax or would like to see what can be done during your estate planning, contact a licensed attorney. The overall point of the article is that PA is one of only a few states that have an inheritance tax and that in two letters to one of our readers, the governor promised to repeal the death tax and, to date, has not done so.
ReplyDeleteWhat happened to Myer regarding the death tax, also happened, and was confirmed, by one of our other readers who wishes to remain anonymous. But do you have any personal experiences with the inheritance tax? Are they the same as these? Are they different? Please let us know.
ReplyDeleteIt is such a shame what happens to these people. It is so confusing and hopefully more people will become educated on this tax to ensure that this does not happen to their loved ones after they pass.
ReplyDeleteThere would be no income tax payable on the proceeds of the home sale if the home is sold by the personal representative of the Estate. Readers should also understand the interplay between inheritance tax and capital gains tax. By paying inheritance tax, the beneficiary is entitled to a basis in the house (for tax purposes) equal to the fair market value of the home when the beneficiary acquires the house rather than the value of the house when the decedent acquired the house. When the beneficiary later sells the house, capital gains tax will be imposed upon the increase in value from the beneficiary's "stepped-up" basis rather than from the much lower basis of the decedent. This results in a much lower capital gains tax bill. Inheritance taxes top out at 15% in Pennsylvania, which is lower than the likely capital gains rate. If inheritance tax was not payable on the transfer of the home from the Estate to the beneficiary, the government would likely calculate capital gains tax using the decedent's basis, resulting in a much larger overall tax bill to the beneficiary. Inheritance tax isn't all bad!
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