Selling an Inherited Home: Taxes and Probate Court

Published by Michelle & Jon Dubner | Dubner Real Estate Group | Equity Union

If you've inherited a home and you're starting to think about selling it, the tax and court pieces are usually less complicated than they sound once someone walks you through them plainly. In most cases, the IRS resets the home's value to what it was worth on the date your loved one passed, which limits how much capital gains tax you owe. Whether the estate needs a full probate court process or can move faster depends on the authority named in the will. Michelle and Jon Dubner work with Santa Clarita families through this every year, and this post walks through the taxes, the two probate paths, and where the court process actually happens.

• Step-up in basis means you're generally only taxed on appreciation since the date of death, not on decades of the original owner's gains.
• Full IAEA authority can close in 45 to 75 days with no court hearing. Limited or no IAEA authority needs a court confirmation hearing and can take 90 to 150 days or longer.
• Every LA County probate hearing, including estates from Valencia, Saugus, Newhall, Castaic, Canyon Country, Stevenson Ranch, and everywhere else in Santa Clarita, happens at the Stanley Mosk Courthouse in downtown Los Angeles.
• When there's more than one heir, everyone (or the personal representative acting for the estate) generally needs to agree on price and terms before a sale can move forward.

If you are weighing a move, start with selling an inherited or probate home.

This is the most misunderstood piece of inheriting a house, and it's usually good news. When you inherit real property, the IRS resets, or "steps up," the home's cost basis to its fair market value on the date of death. When you sell, capital gains tax is calculated only on the appreciation that happened after that date, not on the years or decades the original owner held it. If your parent bought the house in 1985 and it's worth far more today, you are not taxed on that entire gain, only on what it gained between the date of death and your sale.

Inherited property also gets automatic long-term capital gains treatment, no matter how briefly you personally hold it before selling. Every estate is different, and exactly how this applies to your situation is something a CPA or probate attorney should confirm directly.

How fast a probate sale can move depends on what authority the will, or the court if there's no will, gives the personal representative (the executor or administrator handling the estate).

With full IAEA authority (Independent Administration of Estates Act), the personal representative can list the home, negotiate, and accept an offer much like a typical sale. After accepting an offer, a Notice of Proposed Action goes out to all heirs and beneficiaries, who have 15 days to object in writing. If nobody objects, the sale closes without a court hearing. From accepted offer to close, this path typically runs 45 to 75 days.

With limited or no IAEA authority, every sale needs the court's sign-off. The home must be appraised by a court-appointed probate referee, and the accepted offer must be at least 90 percent of that value. The estate attorney files a Report of Sale petition, the court sets a confirmation hearing, and any other interested buyer can overbid the accepted offer right there in the courtroom (minimum first overbid: 10 percent of the first $10,000 plus 5 percent of the remaining balance). The court confirms the sale to the highest bidder. This path typically runs 90 to 150 days or longer, and probate listing agreements are capped at 90 days at a time, renewable up to 270 days total under California law. Neither path is better or worse. It depends on the authority the personal representative was granted, which the estate attorney confirms early on.

This surprises a lot of Santa Clarita families. There is no local probate court in the Santa Clarita Valley. Every Los Angeles County probate case, whether the decedent lived in Valencia, Saugus, Newhall, Castaic, Canyon Country, or Stevenson Ranch, is heard at one courthouse: the Stanley Mosk Courthouse at 111 N. Hill St. in downtown Los Angeles. Any required court appearances, including a confirmation hearing on a limited-authority sale, happen downtown, not locally. That's a logistics detail more than a legal one, but it matters for heirs coordinating a sale from out of the area. It's exactly the kind of detail a local agent who's done this before can help you plan around.

When a home is left to more than one person, generally all of the heirs, or the personal representative acting on the estate's behalf, need to agree on price and terms. This is one of the more common things that slows a probate sale down, even when everyone agrees the home should be sold. If you're one of several heirs, it's worth having that conversation early, before an offer is on the table.

Almost never, and this is one of the more reassuring parts of selling an inherited home. As-is selling is the norm in probate and inherited-property sales. Heirs are often managing the estate from out of town, and buyers who look at these listings generally expect to buy the property in its current condition. You're not expected to renovate a home you didn't live in.

No. California has simplified paths for smaller estates. For decedents who died on or after April 1, 2025, estates with personal property under $208,850 can often use a Small Estate Affidavit instead, after a 40-day waiting period. Separately, under AB 2016, a primary residence worth under $750,000 can sometimes transfer through a simplified petition. Whether either applies depends on the full picture of the estate, so this is a conversation to have directly with a probate attorney.

Sometimes, and it's worth one honest mention here even though this post is about selling. If an heir moves into the inherited home as their primary residence within one year, California's Prop 19 parent-child exclusion can let them keep close to the parent's old, lower property tax basis, up to $1,044,586 above the parent's factored base year value under the current cycle, by filing Form BOE-19-P within three years. If you're selling instead, which is the situation most heirs are in, this exclusion generally doesn't apply, and the home gets reassessed to market value for the new buyer regardless. If keeping the home is even a passing thought, raise it with your CPA before you list.

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If you're an heir sorting through what to do with a Santa Clarita home, call or text us at 661-219-5517, or start with a free home value estimate, and we'll walk you through your specific timeline before you make any decisions.

Michelle & Jon Dubner · Dubner Real Estate Group · Equity Union

If you want the practical version of this for your own situation, here is how we price and market a home here.