Good Morning. I am having a calculation issue that I am hoping you can me me with.
The will provides (1) inheritance tax is to be paid as an expense of the Estate; and (2) Charity is to receive 5% of the Residue.
Under PA Form 1500 you First calculate the 5% Charity and deduct that amount to get your Taxable Amount. However, the Testator wants the Inheritance Tax paid BEFORE calculating the 5%.
Example:
Gross Estate: 100,000
5% Charity 5,000
Taxable: 95,000
Tax at 4.5% 4,275
Therefore, Residue is 90725 and Charity should only get 4536.25. But then the taxes paid are not right.
The math is circular. Thank you in advance.
