Legal Question in Wills and Trusts in Pennsylvania
Taxability of Real Estate Proceeds Deposited in Joint Acct Prior to Death
I am executor for estate of my mother. Before she died, she put her checking account assets, circa 100K, into a joint account with my brother who lived adjacent to her. Most of the account was net proceeds from the 2002 sale of her home in another state (TX).
The state of PA is expecting a remittance for 4.5% of 50% of the balance of the account, as tax on her estate. Do you believe my brother would have a tax liability on the remaining 50%? The account was in both names to assure flexibility in handling living expenses and for access in the event of her death. My brother is identified as a secondary executor in case I am not available.
Should the estate pay tax on the full balance instead of just half? Will that spare my brother any liability associated with the account, or would he be free of that liability anyway? His ''half'' of the account will be distributed in the same manner as the other half of the account (i.e., her ''half'' - the half that PA is expecting to be taxed.)
1 Answer from Attorneys
Re: Taxability of Real Estate Proceeds Deposited in Joint Acct Prior to Death
It sounds like the 100k was placed in a joint account within a year of death. That would be fully taxable by PA inheritance and Federal Estate tax. The estate will pay the tax.
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