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Julie Garber

Changes Made to Pennsylvania Inheritance Tax Laws

By July 16, 2012

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On July 2, Pennsylvania Governor Tom Corbett signed legislation that has exempted working family farms and some related agricultural commodities from the Pennsylvania inheritance tax. The new law provides for the following:

  1. The transfer of the farm land must be between members of the same family.
  2. The farm land must continue to be devoted to the business of agriculture for at least seven years beyond the transferor's date of death.
  3. The farm land must produce a yearly gross income of at least $2,000.
  4. If any tract of farm land that was initially exempt from the Pennsylvania inheritance tax is no longer devoted to the business of agriculture within seven years beyond the transferor's date of death, then the tax will be recaptured in the amount that would have been paid plus interest.
  5. Aside from land used for the business of agriculture, the transfer of an agricultural commodity, agricultural conservation easement, agricultural reserve, agricultural use property or a forest reserve to lineal descendants or siblings is exempt from the Pennsylvania inheritance tax.
  6. The new law applies to the estates of decedents dying on or after June 30, 2012.

For a good summary of the history of the legislation, refer to Pennsylvania attorney Neil E. Hendershot's recent post on his PA Elder, Estate & Fiduciary Law Blog: Family Farms Exempted from PA Inheritance Tax.

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