How much of estate is subject to Inheritance Tax?
The limits you are referring to are related to the filing requirement for Federal Estate Tax returns. For PA Inheritance Tax purposes, there is no “limit” regarding the size of an estate. As long as taxable assets exist, or it’s necessary to probate a Will or secure Letters of Administration, then it is necessary that an Inheritance Tax return be filed. The Inheritance Tax is imposed on the “net value” (value of assets less allowable debts and deductions)and the rate of tax is determined by the relationship of the beneficiaries to the decedent. Pennsylvania also has an Estate Tax which is imposed only in cases where it is necessary that a Federal estate Tax return be filed. (The limit for the Federal requirement is based on the year of death – for decedent’s dying in 2002 and 2003, the limit was $1 million; for 2004 and 2005. It went up to 1.5 million; for 2006 through 2008, the limit is 2 million.
