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Richard
Richard, Attorney
Category: Estate Law
Satisfied Customers: 53986
Experience:  29 years of experience practicing law, including tax and estate planning.
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In California the heir sold house during probate. Are the

Customer Question

In California the heir sold house during probate. Are the funds taxable as heir income by the state of California?
Submitted: 9 months ago.
Category: Estate Law
Expert:  Richard replied 9 months ago.

Hi there. My name is ***** ***** I look forward to helping you.

No, you are not going to have any tax on these sale proceeds. The reason why is that at death, the basis of the property automatically gets adjusted to its fair market value and thus when you sold the house at their fair market value, there was no gain, and thus no tax. You do need to report the sale because the sale proceeds get reported to the IRS, so unless you report the sale and the adjusted basis (to fair market value), the IRS presumes the basis is zero and considers all the proceeds as gain.

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