The Inheritance and Estate Tax Act — Part I

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(Article XXI of the Tax Reform Code of 1971, Act of March 4, 1971, P.L. 6, No. 2, added by Act of Aug. 4, 1991, P.L. 97, No. 22, as amended.)

— PRELIMINARY PROVISIONS —

Section 2101. Short Title.

___This article shall be known and may be cited as the “Inheritance and Estate Tax Act.”

Section 2102. Definitions.

___The following words, terms and phrases, when used in this article, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:

___”Adverse interest.” A substantial beneficial interest in the property transferred which might be adversely affected by the exercise or nonexercise of the power or right reserved or possessed by the transferor.

___”Business of agriculture.” The term shall include the leasing to members of the same family or the leasing to a corporation or association owned by members of the same family of property which is directly and principally used for agricultural purposes. The business of agriculture shall not be deemed to include:

______(l) recreational activities such as, but not limited to, hunting, fishing, camping, skiing, show competition or racing;

______(2) the raising, breeding or training of game animals or game birds, fish, cats, dogs or pets or animals intended for use in sporting or recreational activities:

______(3) fur farming;

______(4) stockyard and slaughterhouse operations; or

______(5) manufacturing or processing operations of any kind.

___”Children.” Includes natural children whether or not they have been adopted by others, adopted children and stepchildren.

___”Clerk.” The clerk of the orphans’ court division of the court of common pleas having jurisdiction.

___”Court.” The orphans’ court division of the court of common pleas of:

______(1) The county in which the decedent resided at the time of his death.

______(2) The county in which letters, if any, are granted if the decedent was a nonresident of this Commonwealth.

______(3) Dauphin County in all other cases.

___”Date of death.” The date of actual death or, in the case of a presumed decedent, the date found by the final decree to be the date of the absentee’s presumed death. For the purpose of determining interest and discount, “date of death” means the date upon which the court enters its final decree of presumptive death.

___”Death taxes.” Includes inheritance, succession, transfer and estate taxes and any other taxes levied against the estate of a decedent by reason of his death.

___”Decedent” or “transferor.” Any person by or from whom a transfer is made and includes any testator, intestate, grantor, settlor, bargainor, vendor, assignor, donor, joint tenant and insured.

___”Department.” The Department of Revenue of the Commonwealth.

___”Exemption income.” All moneys or property, including, without limitation, interest, gains or income derived from obligations which are statutorily free from State or local taxation under any other Federal or State laws, received of whatever nature and from whatever source derived.

___”Financial institution.” A bank, a national banking association, a bank and trust company, a trust company, a savings and loan association, a building and loan association, a mutual savings bank, a credit union, a savings bank and a company that rents safe deposit boxes.

___”Future interest.” Includes a successive life interest and a successive interest for a term certain.

___”Lineal descendants.” All children of the natural parents and their descendants, whether or not they have been adopted by others, adopted descendants and their descendants and stepdescendants.

___”Members of the same family.” Any individual, such individual’s brothers and sisters, the brothers and sisters of such individual’s parents and grandparents, the ancestors and lineal descendents of any of the foregoing, a spouse of any of the foregoing and the estate of any of the foregoing. Individuals related by the half blood or legal adoption shall be treated as if they were related by the whole blood.

___”Notice.” Written notice.

___”Presumed decedent.” A person found to be presumptively dead under the provisions of 20 Pa.C.S. Ch. 57 (relating to absentees and presumed decedents) or, if a nonresident of this Commonwealth, under the laws of his domicile.

___”Property” or “estate.” Includes the following:

______(1) All real property and all tangible personal property of a resident decedent or transferor having its situs in this Commonwealth.

______(2) All intangible personal property of a resident decedent or transferor.

______(3) All real property and all tangible personal property of a resident decedent having its situs outside this Commonwealth, which the decedent had contracted to sell, provided the jurisdiction in which the property has its situs does not subject it to death tax.

______(4) All real property and all tangible personal property of a nonresident decedent or transferor having its situs in this Commonwealth, including property held in trust.

______(5) A liquor license issued by the Commonwealth.

___”Register.” The register of wills having jurisdiction to grant letters testamentary or of administration in the estate of the decedent or transferor.

___”Safe deposit box of a decedent.” A safe deposit box in a financial institution located within this Commonwealth in the name of the decedent alone or in the names of the decedent and one or more persons other than the spouse of the decedent.

___”Secretary.” The Secretary of Revenue of the Commonwealth.

___”Sibling.” An individual who has at least one parent in common with the decedent, whether by blood or by adoption.

___”Territory.” Includes the District of Columbia and all possessions of the United States.

___”Transfer.” Includes the passage of ownership of property, or interest in property or income from property, in possession or enjoyment, present or future, in trust or otherwise.

___“Transfer of property for the sole use.” A transfer to or for the use of a transferee if, during the transferee’s lifetime, the transferee is entitled to all income and principal distributions from the property and no person, including the transferee, possesses an inter vivos power of appointment over the property.

___”Transferee.” Any person to whom a transfer is made and includes any legatee, devisee, heir, next of kin, grantee, beneficiary, vendee, assignee, donee, surviving joint tenant and insurance beneficiary.

___”Value.” The price at which the property would be sold by a willing seller, not compelled to sell, to a willing buyer, not compelled to buy, both of whom have reasonable knowledge of the relevant facts. In determining the value of property, no reduction shall be made on account of income, excise or other taxes which may become payable subsequent to the valuation date by the transferee or out of the property. Value as to land in agricultural use, agricultural reserve or forest reserve means the value which the land has for its particular use according to the standards provided in section 2122.

[Amended by Section 15 of the Act of May 24, 2000, No. 23; Amended by Act 46 of 2004]

Section 2103. Powers of Department.

___(a) The department may adopt and enforce rules and regulations for the just administration of this article.

___(b) The department shall have complete supervision of the making of appraisements, the allowance of deductions and the assessment of tax, including, but not limited to, the power to regulate the actions of registers in the allowance and disallowance of deductions and assessment of tax. The department’s supervision of the making of appraisements includes the employment and compensation of investigators, appraisers and expert appraisers. The compensation of investigators, appraisers and expert appraisers shall be paid from the inheritance tax collections in the respective counties.

___(c) The department shall, in the event that the register fails to take the necessary proceedings in connection with the appraisement, allowance of deductions, assessment of tax or collection of tax, have all the powers vested in the register in this article and, at its option, may take the necessary action and shall charge to the register and deduct from any commissions or fees otherwise due him all costs and expenses incurred by the department in connection with the proceedings.


Evans Law Office
Daniel B. Evans, Attorney at Law
P.O. Box 27370
Philadelphia, PA 19118
Telephone: (866) 348-4250
Email: resources@evans-legal.com

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