From our “Ask a Question” mailbag: My mother died and left us her house. We got two appraisals, which were near the value listed for real estate taxes. Then, we received a cash offer for a higher amount. Do we pay taxes on the appraisal amount, or the amount we will now sell the house for?
You have an argument for both values, but be careful! The Pennsylvania Inheritance Tax is based on the value of the house on the date your mother died. So, you could argue that the appraised value is correct and that the house simply went up in value after her death. This would mean listing a smaller number on the Pennsylvania Inheritance Tax Return, which you would think means less tax.
Not necessarily so!