Q: is selling a house that was inherited taxable?
my Brother sister and I inherited a house from our dad who passed away. He did not live in that house as his primary residence. We are selling the house. It is in escrow. Do we have to pay California tax on the sales price?
Lawyers, want to be a Justia Connect Pro too? Learn more ›
- California
- (916) 704-3009
- View Profile
- Answered
A:
When you sell an inherited house in California, the key factor for tax purposes is the stepped-up basis. The stepped-up basis is the property's fair market value at the date of your father's death. This value is used to determine the gain or loss when you sell the house.
If the sales price exceeds the stepped-up basis, you and your siblings will have a capital gain, which is subject to federal and state taxes. However, if the sales price is equal to or less than the stepped-up basis, there will be no taxable gain. In California, any capital gain will be subject to state income tax.
You and your siblings will need to report the sale on your tax returns. It's important to keep all documents related to the sale and the inheritance, as these will help in calculating any potential tax liability. Always ensure to check the most recent tax regulations or seek guidance for your specific situation.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
