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Home My WebLink About07-02-12~ ~ BUREAU OF INDIVIDUAL TAXES INHERITANCE TAX DIVISION PO BOX 280601 HARRISBURG PA 17128-0601 CYNTHIA L BAUM 1127 ATLAND DR MECHANICSBURG n* „~~,~~ ~ INHERITANCE TAX '"'^,~i. G`1j ~~~~ ORJ TRUST ASSETS -' ~: ~ ~ P~1 I 1J~ / !- CUMB~ A';~p COP; Pq PA 17055-5365 Pennsylvania `~~ °i DEPARTMENT OF REVENUE REV-1604 EX AFP C12-lll DATE 06-21-2012 ESTATE OF BARRON FRANKLIN J DATE OF DEATH 01-23-2012 FILE NUMBER 21 12-0211 COUNTY CUMBERLAND SSN/DC ACN 12111774 Amount Remitted MAKE CHECK PAYABLE AND REMIT PAYMENT TO: REGISTER OF WILLS 1 COURTHOUSE SQUARE CARLISLE PA 17013 CUT ALONG THIS LINE ~--- RETAIN LOWER PORTION FOR YOUR RECORDS •~ ----------------------------------------------------------------------------------------------------------------------------------------------------- REV-1604 EX AFP C12-11) ** INHERITANCE TAX RECORD ADJUSTMENT JOINTLY HELD OR TRUST ASSETS ** DATE: 06-21-2012 ESTATE OF: BARRON FRANKLIN J DATE OF DEATH: 01-23-2012 COUNTY: CUMBERLAND FILE NO.: 21 12-0211 S.S/D.C. N0.: ACN: 12111774 ADJUSTMENT BASED ON: PROTEST BOARD DECISION JOINT OR TRUST ASSET INFORMATION FINANCIAL INSTITUTION: MEMBERS 1ST FCU ACCOUNT N0.:416976-00 TYPE OF ACCOUNT: (X) SAVINGS C ~ CHECKING C ) TRUST ( ~ TIME CERTIFICATE DATE ESTABLISHED 04-25-2011 Account Balance Percent Taxable Amount Subject to Tax Debts and Deductions Taxable Amount Tax Rate Tax Due TAX CREDITS: 17,544.38 X 1.000 17,544.38 12,779.00 4,765.38 X .045 214.44 NOTE: TO ENSURE PROPER CREDIT TO YOUR ACCOUNT, SUBMIT THE UPPER PORTION OF THIS NOTICE WITH YOUR TAX PAYMENT TO THE REGISTER OF WILLS AT THE ADDRESS SHOWN ABOVE. MAKE CHECK OR MONEY ORDER PAYABLE T0: "REGISTER OF WILLS, AGENT." PAYMENT DATE RECEIPT NUMBER DISCOUNT C+) INTEREST/PEN PAID C-) AMOUNT PAID PAYMENT MUST BE MADE BY 10-24-2012*. TOTAL TAX PAYMENT .00 BALANCE OF TAX DUE 214.44 INTEREST AND PEN. .00 TOTAL DUE ~ IF PAID AFTER THIS DATE, SEE REVERSE FOR CALCULATION OF ADDITIONAL INTEREST. IF TOTAL DUE IS REFLECTED AS A "CREDIT" CCR), YOU MAY BE DUE A REFUND. SEE REVERSE SIDE OF THIS FORM FOR INSTRUCTIONS. e ., BOARD OF APPEALS ~~~~~~~~~~~~ , P 0 Box 281021 HARRISBURG, PA 17128-1021 DEPARTMENT OF REVENUE 80ARD OF APPEALS CYNTHIA L BAUM 1127 ATLAND DR MECHANICSBURG, PA 17055-5365 IN RE ESTATE OF: BARRON FRANKLIN J DOCKET NO. TAX TYPE: APPEAL TYPE FILE NUMBER: ACN APPRAISEMENT: PETITION FILED: EXAMINER: MAILING DATE: DECISION AND ORDER 1207584 Inheritance Protest 2112-0211 12111774 3/26/2012 4/4/2012 NHUNG N. VU Direct Dial: (717) 783-7896 Fax: (717)787-7270 Email:nvu@pa.gov June 15, 2012 On March 26, 2012, the Department issued the notice of appraisement and assessment ACN 12111774 advising Cynthia L. Baum, Petitioner, that she was liable for the payment of tax at the 4.5% lineal tax rate on the full date of death value, or $17,544.38, including the $3,000 exclusion, of Members 1St Federal Credit Union Savings Account #416976-00. The Department's action was based on the premise that the account was jointly owned by the decedent and Petitioner. Petitioner argues that there is a surviving spouse, her mother, and that the account was set up solely for the purpose of a funeral fund for the decedent and his surviving spouse. Petitioner states that $12,779 was taken from the bank account at issue to pay for decedent's funeral expenses. Petitioner submitted to the Board a copy of the funeral invoice for decedent's burial expenses of $12,779 and a copy of the bank statement to BARRON FRANKLIN ) BOARD DOCKET NO. 1207584 Page 2 of 4 demonstrate that the bank account at issue was used to pay for the funeral expense. Furthermore, Petitioner submitted a copy of the signature card from Member's 1St Federal Credit Union for the account at issue in which Petitioner and decedent are joint owners. Section 2108(a) of the Inheritance and Estate tax Act of 1991 states: When any property is held in the names of two or more persons, or is deposited in a financial institution in the names of two or more persons, so that, upon the death of one of them, the survivor or survivors have a right to the immediate ownership or possession and enjoyment of the whole property, the accrual of such right, upon the death of one of them, shall be deemed a transfer subject to tax, of a fractional portion of such property to be determined by dividing the value of the whole property by the number of joint tenants in existence immediately preceding the death of the deceased joint tenant. The execution of a joint tenancy contract which provides that all monies are payable to either surviving party is sufficient to establish the Commonwealth's right to the tax. The Pennsylvania Supreme Court in Estate of Brant, 463 Pa. 230 (1975), held specifically that joint accounts created purely for the convenience of the creator are taxable, 'thus entirely eliminating the issue of convenience accounts from inheritance tax law." There have been a line of cases where the Court has held that where parties establish a joint account and there exists an account agreement which explicitly indicates that the account is a joint tenancy with right of survivorship, the account is taxable in proportion to the number of joint tenants in accordance with § 2108(a) of the Inheritance and Estate Tax Act of 1991, and parol evidence is inadmissible even ~if one of the pa.rtiesM had ,not read the agreement. _See alsowEstate of Gillespie Board of Appeals ~ PO Box 281021 ~ Harrisburg, PA 17128 ~ 717.783.3664 ~ www.revenue.state.pa.us BARRON FRANKLIN ) BOARD DOCKET NO. 1207584 Page 3 of 4 462 Pa. 445, 341 A.2d 471 (1975), Estate of Olson, 447 Pa. 483, 291 A.2d 95 (1972) and Estate of Caldwell, 489 A.2d 955 (Pa.Cmwlth. 1985). Upon review of documentations submitted by Petitioner, the Board notes that the Member's 1St Federal Credit Union account at issue was titled in the names of decedent and Petitioner only. Furthermore, the Board the signature card shows that the account was titled as a general membership, not as a "power of attorney." Thus, as this account was jointly owned by this decedent and his daughter, the bank account is taxable to Petitioner for inheritance tax purposes. The Board notes that Petitioner has submitted documentation for funeral expenses. Thus, it is the Opinion of this Board that $12,779 should be allowable deduction. Accordingly, it is hereby Ordered that the protest is sustained in part. The Department is directed to apply $12,779 of deduction for ACN 12111774. FOR THE BOARD OF APPEALS LAUREN ZACCARELLI, CHAIR ANY APPEAL FROM THIS DECISION MUST BE FILED WITH THE ORPHANS' COURT WITHIN SIXTY (60) DAYS OF RECEIPT OF THIS DECISION. A COPY OF THE APPEAL SHOULD BE SERVED ON THE DEPARTMENT OF REVENUE, OFFICE OF CHIEF COUNSEL, P.O. BOX 281061, HARRISBURG, PA 17128-1061. ANY APPLICABLE NOTICE REFLECTING ANY CHANGES TO THE ACCOUNT PURSUANT TO THE BOARD'S DECISION AND ORDER MAY BE MAILED TO YOU BY THE APPROPRIATE BUREAU. Board of Appeals ~ PO Box 281021 ~ Harrisburg, PA 17128 ~ 717.783.3664 ~ www.revenue.state.pa.us `^ w BARRON FRANKLIN J Page 4 of 4 BOARD DOCKET NO. 1207584 IF YOU REQUIRE THIS INFORMATION IN AN ALTERNATE FORMAT UNDER THE PROVISIONS OF AMERICANS WITH DISABILITIES ACT OF 1990, PLEASE CALL (717) 783-3664, OR FOR SERVICES FOR TAXPAYERS WITH SPECIAL HEARING AND SPEAKING NEEDS: 1-800-447-3020 (TT ONLY). Board of Appeals ~ PO Box 281021 ~ Harrisburg, PA 17128 ~ 717.783.3664 ~ www.revenue.state.pa.us