The Short Answer

In Pennsylvania, the key “death tax” issue for inherited real estate is usually Pennsylvania inheritance tax, which is tied to the transfer at death (not the later sale). Inheritance tax is generally treated as due as of the date of death and becomes delinquent if not paid within nine months, and responsibility for paying it depends on how the estate plan and Pennsylvania’s apportionment rules allocate the tax.

What Pennsylvania Law Says

Two different tax concepts commonly get confused in inherited real estate situations: (1) Pennsylvania inheritance tax (a tax on the transfer to beneficiaries at death), and (2) income tax/capital gains that may apply when the property is later sold. Pennsylvania’s inheritance tax rules focus on the transfer at death and how that tax burden is allocated among beneficiaries.

The Statute

The primary law governing who bears Pennsylvania inheritance tax is 20 Pa.C.S. § 3703.

This statute establishes that Pennsylvania inheritance tax is apportioned according to Pennsylvania’s Tax Reform Code rules—meaning the tax burden is allocated among the interests/beneficiaries as the law (and sometimes the will/trust) directs, rather than being automatically paid by one person in every case.

Why You Should Speak with an Attorney

Even though the general rule sounds straightforward, inherited real estate sales often create avoidable tax and probate problems if the timing and payor responsibilities are misunderstood. Legal outcomes often depend on:

• Strict Deadlines: Pennsylvania inheritance tax timing is driven by the date of death, and missing deadlines can trigger interest/penalties and complicate closing.
• Burden of Proof: The estate may need documentation supporting date-of-death value, deductions/expenses, and which party is responsible for the tax under the governing documents and apportionment rules.
• Exceptions: Whether the property passes by will, intestacy, joint ownership, trust, or beneficiary designation can change who is responsible and whether the estate must address tax issues before distributing or selling.

Trying to handle this alone can lead to disputes among heirs, delays in selling the property, or unexpected tax bills that reduce what beneficiaries ultimately receive.

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Disclaimer: This article provides general information under Pennsylvania law and does not create an attorney-client relationship. Laws change frequently. For legal advice specific to your situation, please consult with a licensed attorney.