Inheritance tax is calculated at a percentage of the value of the assets transferred which is determined by the relationship of the heir to the decedent and the decedent's date of death. For dates of death on or after July 1, 2000, the tax rate for Pennsylvania Inheritance Tax is 4.5 percent for transfers to direct descendants (lineal heirs), 12 percent for transfers to siblings, and 15 percent for transfers to other heirs (except charitable organizations, exempt institutions, and government entities). Property owned jointly between husband and wife is exempt from Inheritance Tax, while property inherited from a spouse, or from a child twenty-one or younger by a parent is taxed at a rate of 0 percent.
So yes, you will owe appx. 12% inheritance tax on the inheritance as this will be transfer to sibling.
Link to the instructions
http://www.revenue.state.pa.us/revenue/lib/revenue/rev-1501.pdf
Note that since the inheritance is from IRA too, any distribution you take from IRA will also be subject to federal taxes in the same manner as it will be taxed to the decedent.
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Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases.
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