How long do I have to pay Pennsylvania inheritance tax, and is there a discount?

The Pennsylvania Department of Revenue says inheritance tax payments are due upon the death of the decedent and become delinquent nine months after the death. Delinquent is the word to watch. It means the estate is late, and late tax can add interest. The page does not list the interest rate, so ask the estate attorney or the Department of Revenue for the current figure.

If the inheritance tax is paid within three months of the decedent's death, the department allows a 5 percent discount. On a large bill that can be real money. The catch is the calendar. Three months is short when you still have to open the estate, find the will, and decide what to do with the house. Is the discount worth chasing? It depends on the estate. On a house valued at a round number your attorney supplies, 5 percent of the tax bill is a real saving, but rushing a sale to meet a three-month date can cost more than it saves if the house sells for less. Run both scenarios with your advisor, one with a quick sale and one with a standard listing. Compare what each leaves after tax, costs and carrying expenses, then choose.

A house usually carries the biggest value in the estate, so it drives the bill. If the heirs plan to sell, a quick sale can bring in cash before the nine-month line. If you want to keep the house, the estate may still owe the tax on its value, which means finding the cash another way. This is a good time to meet with an estate attorney or a CPA. They can also tell you what happens when an estate needs more time.

Dates are easier to see with an example. Say a parent dies on March 1. The three-month discount window would run to about June 1. The nine-month delinquency date would fall about December 1. Those are illustrations, not legal deadlines. Your attorney will compute the exact dates. Put both on a calendar the week the estate opens. If the house is going to be sold, ask whether the closing can happen before the first date, and whether the estate has enough cash to pay in time. Also ask who signs the return and who writes the check, since the personal representative usually handles both.

Kaizen Home Buyers buys houses as-is for cash. We can make an offer within 24 hours and close in 14 to 30 days or on a date that fits the estate's schedule. There are no repairs and no agent commission. The personal representative has to be able to sign, so start by getting letters from the Register of Wills. Call 267-329-0084. You can also list the house with an agent if you are not under time pressure.