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Personal Finance (Not Investing) • Tax and estate implications from moving elderly parent into house from out of state to Pennsylvania?

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We are considering moving my elderly father (early 80s) into our house so that he can spend a few good remaining years with his only grandchildren. My mother is deceased and the only beneficiaries in the will my sibling and myself.

Although the personal finance aspect of this is not a driver of the decision, we want to have a good idea of the implications before bringing it up with my sibling and talking about it more in depth with my father.

A snapshot of his personal finances:
  • No debt
  • Lives and owns a house in Michigan, roughly $250k of value. This would be sold upon moving.
  • Pension from working 40 years at public university in Michigan
  • Roughly $2M in 403(b) from the same university
From my understanding, there is no taxing of distributions from retirement accounts in PA. Similarly, retirement benefits in MI are in the middle of a phase out of their tax treatment and will be non-taxable starting in 2026 [0]. So really no difference in here.

The big thing is that moving to PA would mean his estate would then be subject to the PA inheritance tax [1]. This means both myself and my sibling would need to pay the 4.5% tax on any inherited assets.

Are there any major things I could be missing?

[0] https://www.michigan.gov/taxes/iit/reti ... n-benefits
[1] https://www.revenue.pa.gov/TaxTypes/Inh ... fault.aspx

Statistics: Posted by ScaledWheel — Sun Sep 08, 2024 11:58 am — Replies 1 — Views 44



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