• Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Masters Advisors

  • About Us
  • Our Approach
  • Our Services
  • Corporate
  • Blog
  • Contact
  • Client Log-in
Client Log-in Contact Us

The Master’s Minute

Helpful Tools and Tips

Inheritance in Pennsylvania

November 15, 2018 by Robert B. Miller

When you receive an inheritance in Pennsylvania, along with the good news you might also get some bad news. I have listed some of the good news as well as some of the bad news that accompanies certain assets Pennsylvania residents inherit.

Traditional IRA, 401(k), 403(b)
Good news: Since there are named beneficiaries, this asset does not pass through probate. You will not owe Pennsylvania state income tax*
Bad news: You will owe federal income tax, and Pennsylvania state inheritance tax* will be assessed as well.
*PA Tax Guide

Non-Qualified Annuity
(Not an IRA)
Good news: Since there are named beneficiaries, it is not a probated asset. You will not owe federal income tax or Pennsylvania state income tax on the cost basis.
Bad News: You will owe federal and Pennsylvania state income tax on the gain. Pennsylvania state inheritance tax will be levied on the total value of the annuity.

Stocks, Bonds, Mutual Funds
(Not Heid in a retirement account)
Good news: Because you get a stepped-up cost basis, you will not owe federal or Pennsylvania state income tax.
Bad news: These assets typically have to go through the probate process, and Pennsylvania state inheritance tax will also have to be paid.

House
Good news: You get a stepped-up cost basis so there is no federal or Pennsylvania state income tax due.
Bad news: If someone other than the spouse inherits the house, the house will probably have to go through the probate process, and Pennsylvania state inheritance tax will have to be paid.

Cash
Good news: There is no federal income tax or Pennsylvania state income tax for heirs.
Bad news: It is a probated asset, and Pennsylvania state inheritance tax will be levied.

Life Insurance
Good news: Since there are named beneficiaries, it is not a probated asset. It is federal and Pennsylvania state income tax-free and Pennsylvania state inheritance tax-free.
Bad news: If the deceased policy owner’s estate exceeded the federal exemption limit ($11,200,000 in 2018), the policy’s death benefit would be considered part of his or her taxable estate.

It is always helpful to be informed when you inherit valuable assets. Since each person’s situation is unique, we suggest that you consult your tax advisor with questions specific to your circumstances.

Filed Under: Blog, Financial Planning

Primary Sidebar

Categories

  • Behavioral Finance
  • Blog
  • Client Service
  • Current Newsletters
  • Faith Integration
  • Financial Planning
  • General
  • Investing
  • Market + Industry
  • Master's Minute
  • Master's News
  • Personal Development
  • Strategy
  • What's the Point?

Search Blog

Archives

Footer

Receive Master’s Minute Blog Articles Today

  • This field is for validation purposes and should be left unchanged.

480 New Holland Ave
Suite 7201
Lancaster, PA 17602

  • 
  • 

Contact Us

Albridge log in | Client log in

© 2023 Master’s Advisors • Developed by TinyFrog • Important Disclosures | Privacy Policy

Securities offered through Securities America Inc., member FINRA/SIPC. Master's Advisors is not affiliated with the Securities America companies. Advisory services offered through Securities America Advisors, Inc. This site is published for residents of the United States and is for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to buy any security or product that may be referenced herein. Persons mentioned on this website may only offer services and transact business and/or respond to inquiries in states or jurisdictions in which they have been properly registered or are exempt from registration. Not all products and services referenced on this site are available in every state, jurisdiction or from every person listed. This communication is strictly intended for individuals residing in the states of CO, DE, FL, IL, IN, KY, MD, ME, NC, NE, NJ, OH, OK, PA, SC, TN, TX, VA, VT, WV, WY. No offers may be made or accepted from any resident outside the specific state(s) referenced. PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the websites provided here, you are leaving this website. We make no representation as to the completeness or accuracy of information provided at these websites. The company is not liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third party technologies,  websites, information, and programs made available through this website. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the websites you are linking to. All images and Content Copyright © 2020 Masters Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore it is important to coordinate with your tax or legal advisor regarding your specific situation.

Securities America Form CRS

Check the background of this firm on FINRA's BrokerCheck.