Capital Gains Tax When Selling an Inherited Home in California

Capital Gains Tax When Selling an Inherited Home in California

When someone inherits a home in California, one of the biggest financial considerations is capital gains tax. The good news for heirs is the step up in basis rule. This rule resets the tax basis of the property to its fair market value at the time of the original owner's death. For example, if a property was purchased decades ago for $300,000 but is worth $2 million at the time of inheritance, the tax basis resets to $2 million. If the property is sold shortly after inheritance for a similar value, there may be little or no capital gains tax owed.

Distinct Concierge Real Estate Helping clients find their home and build their legacy. If you are dealing with an inherited home or probate property in Los Angeles or San Diego, our team can help you evaluate the property, understand the market, and develop a strategy to maximize value. Schedule a private consultation to discuss your options and create a plan for selling your inherited property.

👉 Contact for Advisory:
📩 [email protected]
🌐 www.distinctconciergere.com
📞 323-615-1963

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FAQ
Q: What is a step up in basis?
A: It resets the property's tax value to its market value at the time of inheritance.

Q: Do heirs always pay capital gains tax? 
A:Taxes may apply only to appreciation that occurs after the property is inherited.

Q: Should heirs speak with a tax professional before selling? 
A: Yes, because tax situations vary depending on ownership structure and timing of sale.