Tax on inherited property sold in CA by non-res. - Posted by Bill Kanter

Posted by William L. Exeter on July 07, 2003 at 21:37:41:

The Tax you are referring to is actually the California Franchise Tax Board’s withholding requirement and not actually a tax. You will receive a full refund once you file your California income tax return if you in fact do not owe any tax on the sale of the property. It is not a tax, but actually an estimated withholding amount or prepayment if you will. There are some exceptions, but too much to go into here in my response. We have copies of the actually FTB brochures, documents and forms on our Web site at

Hope this helps.

Bill Exeter
Diversified Exchange Corporation

Tax on inherited property sold in CA by non-res. - Posted by Bill Kanter

Posted by Bill Kanter on July 06, 2003 at 18:55:18:

My father died in Aug 2000. My brother and I inherited his condo bought in 1986 for $94,000. We sold it immediately for a profit of approx $49000 which was used to pay some of his debt. From what I understand we do not owe any tax on this property because it was inherited and we sold it at a fair market price within two months of our father’s death. What is CA trying to do demanding a CA tax filing? They held 3.3% at sale of property then waived the withholding and sent it back to us. Now we’re getting hassled.

Tax on inherited property sold by CA non-res. - Posted by Diane (TX)

Posted by Diane (TX) on July 06, 2003 at 20:51:27:

CA is very aggressive on trying to tax sales of property within the state. You don’t owe tax, since your basis is stepped up to FMV at date of death. CA doesn’t know that there’s no gain unless you file a CA income tax return or an explanation of why you’re not filing.

It takes about three letters before they stop hassling you. I’ve had better luck calling the phone number on the notice and speaking to a live person. (They answer their phones in a reasonable time.) Explain the situation, and ask the quickest way to resolve the problem. With luck, the CA rep will mark your file as no return due, and you’re done.