YANML but YAAL in Pennsylvania, with experience dealing with estates/probate.
I am the executor of my father's estate; he died in small town Pennsylvania, which is far from where I live. I have one step left in dealing with probate and wrapping up the estate, but my lawyers have given me confusing information and I'm not sure they're doing the right thing, so I'm here for a second opinion. Finding a lawyer was difficult, finding another would not be impossible but would be that much more difficult; I'll do it if I need to, but I'm hoping you all can help me determine if I do need to, or if my lawyers are right but just incapable of explaining this to a layperson.
The details of the situation are thus: everything has been done but for the inheritance tax filing. I've sold his assets, transferred his stocks and his money to an estate account. The cash/stocks were in the very low 6 figures; his car and his house had to be sold at a loss, and his property was worth less than $2,000 all told. I have filed his final personal income tax return, an income tax return for the estate, and sent a preliminary check for the inheritance tax to the county in which he died, for just over $1,700, the 4.5% tax rate for direct descendants, based on the amount of cash I had received at that point (he had multiple accounts, which took me months to locate and close). The sale of his assets - again, all done at a loss - was done after this point. Within a year, I'd located all of his money - again, the very low 6 figures. I recognize I should pay more than I paid in the initial filing since I was doing so not based on the totality of the estate (there was a discount if the tax was paid within 90 days, hence the rush).
PA then sent me a letter saying the inheritance tax form was missing, which makes sense - I'd sent the check (which they received and cashed), but did neglect to follow up with a form, which I asked the lawyers to do. They replied that I need to pay nearly $7,000 - contrary to every figure I've seen about how inheritance tax is calculated in PA. I asked why I needed to pay this when I'd already paid the inheritance tax - and this is where their reply made no sense. According to their draft tax form (a REV-1500), I need to pay tax on the assets, the expenses charged to the estate (my travel to and from PA to deal with things, utility bills before selling the house, etc), the funeral expenses, etc, all tallying to the aforementioned 7k. I can't see how this makes any sense, they can't explain it, and I'm not sure if I'm being taken advantage of or if I'm just not understanding what's going on.
Please help me make sense of this so I can take the correct next steps and wrap this up for good.
Many thanks in advance. |
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