Pa Estate Law – Taxation
A major area of misinformation and misunderstandings in the estate law and estate planning areas are the taxes that are imposed upon one’s death in Pennsylvania.
Very simply, two death taxes can be imposed on the death of Pennsylvania residents – the:
However, and unlike the income tax, which is very descriptive in its title as it is imposed upon your income, the phrases Estate Tax and Inheritance Tax are misnomers in that may tend to belie the actual fact that these are taxes imposed by virtue of your death.
The Federal Estate Tax
Historically, the Federal Estate Tax has begun at a wealth threshold. If you possess less than the wealth threshold at your death, the federal estate tax will not be applicable.
If it is applicable, the tax is imposed on a percentage scale according to the amount of your wealth (i.e., potentially 47% of the value of your assets above the wealth threshold).
The current wealth threshold of the Federal Estate Tax has been changing drastically throughout the last decade. It has increased, disappeared, and reappeared in 2011.
In 2005, the threshold was $1,500,000.00; in 2006, 2007, and 2008, the threshold was $2,000,000.00; in 2009, the threshold was $3,500,000.00; and in 2010, the Federal Estate Tax [Read more…] about Pa Estate Law – 3 – Taxes