Feb 12, 2013
Category: Estate Planning
There is good news for those whose estate planning includes real estate used for agriculture businesses in Pennsylvania. Previous legislation levied an inheritance tax whenever such property transferred from one generation to the next or between family members. This new legislation creates a tax exemption for agricultural real estate, and applies to all estates fitting this mold after June 30, 2012. However, some conditions do apply.
In order to qualify for this Pennsylvania inheritance tax exemption, the property must:
- Be devoted to agriculture for a minimum of 7 years after the decedent’s death
- Produce a minimum yearly gross income of $2,000
- Be passed to members of the same family
Failure to meet and adhere to these conditions could result in a retroactive inheritance tax – meaning the property would be taxed the originally exempted amount, and this includes real estate used for agriculture after a death but failing to do so for an entire seven year period.
This new law also covers the transfer of other select agricultural and conservation properties within the same family.
This is excellent incentive for Pennsylvania agriculture businesses, farm owners, and conservation landowners to review their estate planning and ensure it is up to speed with this new legislation, allowing them to afford significant tax savings to their immediate families and future generations. A qualified estate planning attorney can assist you in understanding this new legislation, in determining if your property qualifies for this inheritance tax exemption, and in preparing the appropriate documents to protect your business assets.