For the PA Inheritance Tax, the rule is that when a joint owner dies, a fraction of the joint account is subject to the Inheritance Tax. The fraction is one (1) over the number of joint owners. In the example above, there were two (2) joint owners, so, upon the death of either, half of the account is subject to PA Inheritance Tax. If there were three (3) joint owners, then one-third of the account would be subject to Inheritance Tax upon the death of one of the owners.

The treatment of joint property for the PA Inheritance Tax should not be confused with the rules for the Federal Estate Tax. The rules for Federal Estate Tax are quite different, as the Internal Revenue Code applies a “contribution” test. For example, if mom put her $100,000 CD in joint names, then, upon her death, 100% of the value of the account would be subject to the Federal Estate Tax.

As with any PA Inheritance Tax issues, an executor or personal representative of an estate should always seek the advice of an experienced lawyer and/or a CPA who can provide proper tax guidance.

 

Contact A PA Joint Property Lawyer in Montgomery County, PA

The PA Inheritance Tax lawyers at The Martin Law Firm are experienced in Pennsylvania probate and estate matter, including assisting executors and personal representatives with the preparation and filing of PA Inheritance Tax returns. Please contact a knowledgeable PA Inheritance Tax lawyer at The Martin Law Firm at 215-646-3980 for a free case evaluation.