Instructions For Form Rev-1737-A - Pennsylvania Inheritance Tax Return Nonresident Decedent Page 19
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26individual retirement annuities, and individual retirement
4. TRANSFERS IN WHICH THE DECEDENT
bonds will be exempt from tax if any of these conditions exist:
RETAINED A LIFE INTEREST -
Transfers under
which the decedent expressly or impliedly reserved for life or
a. The payments are exempt from the Federal Estate Tax
any period which does not, in fact, end before death the
under the provisions of the Internal Revenue Code of 1986, as
income or the enjoyment or the property. For example, a life
amended, any supplement to the code, or any other similar
interest in real estate includes the right to use or occupy the
provision in effect for Federal Estate Tax purposes; or
real estate or receive rents.
b. The payment would be exempt for Federal Estate Tax pur-
5. PROMISES BY TRANSFEREE -
Such transfers are
poses if it had not been made in a lump sum or other nonex-
those under which the transferee promises to make payments
empt form of payment, and the payment is made in a lump
sum or other nonexempt form of payment; or
to or care for the transferor during the remainder of the trans-
feror’s life.
c. The decedent, during his lifetime, did not have the right to
possess (including proprietary rights at termination of
6. REVOCABLE AND TENTATIVE TRUSTS -
employment), enjoy, assign or anticipate the payments made.
Transfers under which the decedent had, either himself or in
conjunction with another person, a power to alter, amend or
A decedent whose only rights under the plan were to desig-
revoke the interest of the beneficiary, such as, an account reg-
nate a beneficiary and to receive a regular monthly payment
istered in the name of the decedent in trust for another per-
under the plan, is not considered as having the right to pos-
son. The relinquishment of such a power within one year of
sess, enjoy, assign, or anticipate. Therefore, the possession of
the death of the transferor is a transfer subject to tax.
either the right to designate a beneficiary or the right to
receive regular monthly payment under the plan, either alone
or together, will not subject the plan to Inheritance Tax, as
Please note that the $3,000 exclusion is not applicable to the
long as no other rights exist.
transfers described in paragraphs 2 through 5 above.
However, the $3,000 exclusion would apply under paragraph
In general IRAs are taxable if the decedent was age 59 or
5, if the decedent relinquished the right to revoke within one
older, or considered disabled at any age.
(1) year of the date of the decedent’s death.
2. TRANSFERS MADE WITHIN ONE (1) YEAR
OF DECEDENT’S DEATH -
Such transfers by a dece-
Schedule G must also be used to report assets that were cre-
dent are subject to tax to the extent that they exceed $3,000 at
ated or transferred into joint tenancy in the name of the dece-
the time of the transfer or a combined total of all transfers per
dent and another or others, including the decedent’s surviv-
transferee during any calendar year exceeds $3,000. For
ing spouse, within one year of the decedent’s death. Any joint
example, if the decedent transferred $10,000 within one year
tenancy so created will cause the entire interest to be taxed in
of his death, $7,000 would be subject to Inheritance Tax. For
the estate of the person creating the joint tenancy to the extent
estates of decedents dying on or before December 12, 1982,
that the total value of the assets placed in joint ownership
there is a presumption that transfers of a material part of an
with any one person exceeds $3,000. For estates of decedents
estate made by a decedent within two (2) years of death were
dying on or before December 12, 1982, joint tenancies created
made in “Contemplation of Death”, where the dominant or
within two (2) years of a decedent’s death are presumed to
impelling motive, but not necessarily the sole motive, of the
have been created in “Contemplation of Death” and are fully
transferor was prompted by the thought of death, without
taxable unless the presumption is rebutted. (See “1” above.)
which motive the transfer would not have been made. In such
instances, the entire value of the transfer is subject to tax,
unless the presumption is rebutted by the submission of rele-
If you answer ‘yes’ to any of the questions on the reverse side
vant evidence.
of the cover sheet, you must complete Schedule G and file it
as part of the Inheritance Tax Return.
3. RETAINED REVERSIONARY INTEREST -
Such transfers are those in which the transferor (decedent)
Fully describe the transferred property and show the total
reserved the right to regain or reassert control over the corpus
value and the value of the decedent’s interest in the asset. You
of the transferred property provided that the value of the
may submit copies of documentation supporting a position of
reversionary interest in the property immediately before the
non-taxability or which explains how the reported values
decedent’s death was in excess of 5% of the value of the trans-
ferred property.
were determined.
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