Understanding Transfer Tax between Family Members

By Anne Heefner

Transfer Tax is a tax charged when transferring Real Estate Property in the Commonwealth of Pennsylvania. The State charges 1% of the value of the property which is determined either by the sale price or by a formula to calculate the Fair Market Value. Local Governments also charge transfer tax that ranges anywhere from an additional 1% - 4% of the value of Real Estate Property depending on what County, City, Township, or Borough the property is located in.

In some instances when family members are transferring properties, the transfer becomes tax exempt. Navigating some of rules for determining exemptions can be difficult, but there are some basic general guidelines for family exemptions listed below which are important to keep in mind.

1.) Transfers between persons that are currently married or were previously married are considered exempt. If a couple recently divorced but the real estate that is being transferred was purchased during the time they were married (or purchased by one of the spouses during the time they were married), one spouse could still transfer the real estate to the second spouse, despite being divorced under the spousal exemption.

2.) Transfers between great-grandparents, grandparents, parents, and children are all considered tax exempt. These transfers are considered to be between family lineal relationships and therefore fall under the exemption. It is also important to note that spouses are also included in this exemption. For example if grandparents transfer a property to the spouse of their grandson (and their grandson was deceased) the exemption would still apply to the spouse so long as the spouse had not remarried.

3.) Transfers between siblings are considered tax exempt as long as they both have the same parent. Again spouses are also included in this exemption similar to the above. If one sister wanted to transfer a property to her brother-in-law (because her sister was deceased), the transfer would be considered exempt so long as the brother-in-law had not remarried.

If you are considering transferring property between family members, come speak to one of our knowledgeable attorneys so they can help you with the document preparation and navigating the intricacies of the rules for determining whether transfer tax is due. We will be able to help walk you through the process and take the guesswork out of what needs to be done.

For more information contact Anne Heefner by phone at 717-591-1755 or 888-743-4470 or by email at [email protected]

Labor Day: Celebrating Our Workforce

On the 5^th of September, we celebrated Labor Day. The long weekend was an opportunity for Americans to reconnect with friends and family, a last chance before the start of fall.

Labor Day was first celebrated unofficially by labor activists and individual states in the late 1800s. The first bill recognizing Labor Day was introduced in New York and later codified into law in Oregon.

The purpose of Labor Day is to honor workers and recognize their role in our society. The Labor Day holiday holds a much deeper meaning, rooted in the 19th century fight for fair working conditions. It's a continuous struggle to fight for what is fair from minimum wages to paternity leave.

For the past two years, we have all been adjusting to a new normal and a new way of living as a result of the COVID-19 pandemic. The pandemic has caused many of us to think about where, when, and even how we work. Many have chosen to continuing working from home while others couldn't wait to get back to the office.

With the recent supply chain issues, we learned how much we rely on our transportation system especially our truck drivers. Let us give thanks to all the workers out there who make our country function and prosper.

Fall is Here!

Every mid-September, we greet the fall season with the arrival of the autumnal equinox.

The autumnal equinox, also called the fall equinox, is the start of autumn in the Northern Hemisphere. This is a time for change. The sun crosses the celestial line, signifying that things will soon be different in our beautiful world of nature and life.

The equinox is a time when day and night are approximately equal in length. As the Earth's tilt moves farther away from its maximum lean toward the sun, rays diagrammatically hit more southwardly on our planet, leading to fewer hours of daylight with colder temperatures during winter months following this event. This is the time of year when Daylight Savings Time ends.

The equinox is a time for change, and that seems to be happening with the coming of autumn. The days are getting shorter as we near winter's arrival and our hours grow increasingly dark each day. Essentially, our hours of daylight have been growing slightly shorter each day since the summer solstice in June, which is the longest day of the year. Then, for the next three months, our hours of daylight will continue to grow shorter.

The equinox is a time for celebration in many parts of the world. The ancient Druids and Mayans had already begun their rituals centuries ago to commemorate this event, and the changing of the seasons meant that the harvest season was soon to arrive.

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Encouraging Good Learning Habits

The COVID-19 pandemic has affected the way learning has been presented around the world. From school closures, and physical/social distancing, it’s a lot to navigate and challenging for parents and students.

1. Planning a routine together

A good way to encourage your children is by establishing a routine that factors in age-appropriate education programs that can be followed online, on the television or through games. Use everyday activities as learning opportunities for your children. Don’t forget to come up with these plans together. If your child is seeming restless and agitated when you’re trying to follow an online learning program, switch up your activities to a more active option.

2. Have open conversations

Encourage your children to ask questions and express their feelings with you. Remember that your child may have different reactions to stress, so be patient and understanding. Start by inviting your child to talk about the issue. Find out how much they already know and follow their lead. Make sure you are in a safe environment and allow your child to talk freely. Drawing, stories and other activities may help to open a discussion. Try not to minimize or avoid their concerns. Be sure to acknowledge their feelings and assure them that it’s natural to feel scared about these things. Demonstrate that you’re listening by giving them your full attention, and make sure they understand that they can talk to you or their teachers whenever they like.

3. Take your time and don’t rush

Take proper caution and understand that your child can only learn up to a certain amount. Don’t rush into things they wouldn’t be able to take in, in such a short amount of time. Start with shorter learning sessions and make them progressively longer. Within a session, combine online or screen time with offline activities or exercises.

4. Protect your children from online platforms

Digital platforms such as social media, streaming services and YouTube provide an opportunity for children to keep learning, take part in play and keep in touch with their friends. However, increased unmonitored access online brings heightened risks for children’s safety, protection and privacy. Discuss the internet with your children so that they know how it works, what they need to be aware of, and what appropriate behavior looks like on the platforms they use, such as video calls. Establish rules together about how, when and where the internet can be used. Set up parental controls on their devices to mitigate online risks, particularly for younger children. Identify appropriate online tools for recreation together.

5. Stay in touch with your children’s education

It’s best to stay in touch with your children’s teacher or school to remain informed, ask questions and get more guidance.