Pennsylvania inheritance Law Interpretation

[Chris Seveney]

For those who invest in Pennsylvania, just wanted to post a PSA

Below is a link to an article but to break it down in a nutshell:

If you are a lender and the borrower is deceased and you foreclose on the property, the winner at auction is responsible to pay a 15% inheritance tax on appraised value.

Now in most instances it’s the lender who is the winner at auction as they take the property back. So the lender would be responsible for this - in speaking with my attorney (not related to link below) you would not be able to sell it with clear title until the inheritance tax is paid.

Yes this is crazy but it’s how it’s being interpreted right now until challenged in court

https://www.lenderlaw.com/post/new-department-of-revenue-policy-complicates-foreclosure-sales?fbclid=IwAR1U5OwC_Xjno8UCW43lypOtfAxEy8Pg90KpDF9sfzC1oYHRyqZ0GxbJMok

[Chris Seveney]

@Ned Carey

My attorney has said it’s a new Interpretation and is even being done on tax sales

Here is what I found about 15% (staggered rate but non exempt entities are 15%)

https://www.revenue.pa.gov/FormsandPublications/FormsforIndividuals/InheritanceTax/Documents/rev-720.pdf