L retains a life estate interest in the real estate. The taxable value of Ts life estate interest is the computed value of the entire real estate multiplied by the life estate factor based upon Ts age.Įxample 3: L conveys a remainder interest in real estate to T for less than actual monetary worth. The computed value of the entire real estate is $100,000. L reserves the remainder interest for himself. The taxable value of the life estate is the consideration paid, that is $50,000.Įxample 2: L conveys a life estate interest in real estate to T for less than actual monetary worth.
#Conveyance in real estate pa update#
The Department will update the factors periodically as needed to account for changes in mortality and interest rates.Įxample 1: In an arms length transaction for actual monetary worth, L conveys a life estate interest (or remainder interest, as the case may be) in real estate to T for $50,000. The Department will use the factors contained in the Internal Revenue Service Table using an interest rate equal to the average interest rate for the 36 consecutive months prior to the publication of the factors in the Pennsylvania Bulletin. The factors will be based upon tables published by the Internal Revenue Service for calculating the present worth of a life estate and remainder interest. (d) The Department will publish by notice in the Pennsylvania Bulletin life estate and remainder factors and their effective date to be used for the calculation of the taxable value of a life estate and remainder interest in real estate. (c) When consideration that is paid or to be paid for the conveyance of real estate or the computed value of real estate must be apportioned to calculate the taxable value of a life estate or remainder interest that is part of the conveyance, the life estate and remainder factors as provided in subsection (d) are multiplied by the consideration paid or to be paid for the conveyance of the real estate or the computed value in order to calculate the value of the life estate or remainder interest. (b) When no or nominal consideration or consideration less than actual monetary worth is paid for a life estate or remainder interest in real estate, life estate and remainder factors as provided in subsection (d) are multiplied by the real estates computed value in order to calculate the value of a life estate or remainder interest. (a) The value of a life estate or remainder interest in real estate will be the consideration paid or to be paid for the life estate or remainder interest except as provided for in subsection (b) or (c). § 91.165. Reservations or conveyances of life estates.
#Conveyance in real estate pa code#
Code § 91.165. Reservations or conveyances of life estates.
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