Do I have to pay capital gains tax when I sell an inherited home in California?

Usually very little or none if you sell shortly after inheriting. The step-up in basis resets your cost basis to the fair market value on the date of death. If you sell for the same price or close to it, your capital gain is minimal. If you hold the property and it appreciates further, you will owe capital gains only on the appreciation above the stepped-up basis.

How long does it take to sell an inherited home in San Diego?

It depends on how title was held. Trust sales typically close in 3–6 months from death. Full-authority probate sales take 9–12 months. Court-confirmation probate sales take 12–18 months. Joint tenancy transfers clear in 2–4 weeks, after which the sale can proceed as a standard market transaction.

Can I sell an inherited home without going through probate?

Yes, if the property was held in a living trust, as joint tenancy, or as community property with right of survivorship. These transfer methods bypass probate entirely. Only properties held in the deceased's name alone (or as tenants in common without survivorship rights) require probate.

What if the inherited home has a mortgage?

The mortgage must be paid off at closing from the sale proceeds. The Garn-St. Germain Act prevents lenders from calling the loan due solely because of the owner's death, giving heirs time to sell or refinance. If the estate cannot make mortgage payments during the sale process, the lender may begin foreclosure proceedings, so it is important to act promptly.

Do all heirs have to agree to sell an inherited property?

If the property is held as tenants in common (the default for inherited property when not held in trust or joint tenancy), all co-owners must agree to sell. If one heir refuses, the others can file a partition action in San Diego Superior Court, which can force a sale. This is a last resort — partition litigation is expensive and time-consuming.

What is the step-up in basis and why does it matter for inherited homes?

The step-up in basis resets your cost basis for capital gains purposes to the fair market value of the property on the date of the decedent's death. For a San Diego home purchased in 1985 for $180,000 and now worth $2.8M, the heir's basis is stepped up to $2.8M — meaning they could sell for $2.8M and owe zero capital gains tax. This is one of the most powerful tax benefits available to heirs of appreciated real estate.

Selling an Inherited Home in San Diego: Complete 2026 Guide