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Estate Tax Explains Joe Paterno House Sale?

In the midst of the Jerry Sandusky sex abuse scandal at Penn State some people pointed to head football coach Joe Paterno’s sale of his house to his wife for $1 as possible evidence of the 84-year-old coach’s culpability.

But what if the Joe Paterno house sale for $1 had more to do with estate tax, asks the New York Times.

Whispering about the house started when people learned that the home worth nearly $600,000 had been sold to Joe Paterno’s wife for $1. Speculation was rife with the idea that Paterno had sold the house because he expected personal injury lawsuits from sex abuse victims of his assistant coach Jerry Sandusky.

But now the New York Times suggests that perhaps the aim of selling the house for $1 -- a few months before the news of the sex scandal broke -- may have to do with 84-year-old's ill-health. Paterno may have been trying to give his heirs a chance to save money on estate tax once both he and his wife pass away.

Understanding estate tax may seem complicated but it can save families a great amount of money. Basically, estate tax is imposed by the federal and state government on property at the time of the property-owner's death. An estate must file an estate tax return.

However, under current law this is only necessary if the gross value of the estate is more than $5 million (yes we're talking about millionaires here). You generally have between nine to fifteen months to pay the estate tax. Also keep in mind that New York's estate tax will be separate from the federal estate tax.

To learn more about federal estate tax and what relationship it has to New York estate tax please contact a local estate planning attorney.

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