Philadelphia Sheriff sale inheritance/estate tax issue

[Yuriy Skripnichenko]

Hi all.

I ran into a problem that probably the person who lost the property at Tax Sale was deceased at the time. Therefore, there is a possible Inheritance Tax Issue on this.

So now we have to do a search on the person who lost the property at the tax sale and hopefully she is alive. Otherwise current owner will have to pay estate tax which is 15% of the tax sale amount or the property value at the time of sale (whichever is grater)

Title company told me that it is a new thing that came up a few months back and the state is trying to collect all the estate taxes.

Does any have experience dealing with this? How long does it take for the state to actually issue the bill if the search comes back that previous owner was deceased? 

[Chris K.]

@Yuriy Skripnichenko

Never had to deal with this issue myself but conceptually I could see the Department of Revenue making this argument. 

Assuming you have to pay the inheritance tax, you don't need to wait for the Commonwealth to provide you with the bill. You just pay it based on the value and the tax amount. The title company should know how to do this. If not, find a new one. 

But before doing all that, is this title company going to let you get title insurance without bringing a quiet-title action? Not sure what exactly you intend to do with this property but you may want to look into that first. 

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