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Updated over 4 years ago on . Most recent reply

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Bernie McAnena
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Repository Sale - PA

Bernie McAnena
Posted

I am looking at a property for a repository sale in Wayne County, PA. Both owners listed are deceased (first passed on 2013 and second in 2017) and from NJ. Doing some digging I found that their home in NJ was foreclosed on by the bank which would lead me to believe the estate was insolvent but I can't find any record of the estate going through probate. From reading prior posts it seems I may be required to pay inheritance tax on the property, is that correct? Any other potential pitfalls I should be aware of?

I am going to have a title company research and tell me what I would need to do to make it marketable once I drive by the property this weekend. The obituary I found did list a daughter and granddaughter, which is how I know both owners are deceased. Any potential challenge that can be made by the descendants? Based on the timing it seems the taxes were past due before the second owner passed, so he should have been notified. Should I check to see if descendants were notified?

The property is in a private community and I spoke with them and they stated any past dues would not be collectable. I intend to use the property as a vacation home/rental. Given prior advice I will not be doing any major improvements for at least a year. My hope is that I can take possession of the property and simply wait for the inheritance tax statute of limitations to expire (which I understand to be 20 years + 9 months). Also hoping to avoid contacting the descendants if at all possible. Seems I could wait 10 years under the new rules in PA and assert adverse possession down the line.

I know this is a lot and could be very tricky but if the property is in decent shape I plan to hold long term, so I am hopeful I can avoid some of the headaches that come with a tax sale.


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Chris K.
  • Attorney
  • Nashville, TN
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Chris K.
  • Attorney
  • Nashville, TN
Replied

@Bernie McAnena

Pennsylvania Inheritance tax is based on the situs (basically the location) of the property. If it the property is in Pennsylvania, the inheritance tax applies. If it is outside of Pennsylvania, then no Pennsylvania inheritance tax. 

When it comes to tax sales, you just have to assume the worst or be prepared to sunk money into the due diligence. Because of this, there's a lot of risk involved in tax sales. It's easily the riskiest way to purchase real estate in Pennsylvania. 

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

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