Mother died and left her home in a revocable trust to two daughters and two granddaughters. There are no other Estate assets. The home was left unoccupied for one year and then sold with a capital gain of $80,000. Home was left in Mother's "Estate Trust" (which became irrevocable at her death) during the period of death until sale one year later (this year in March 2021).
The money from the sale was put into an "Estate Trust" bank account at a bank by its Successor Trustee and will be distributed soon. I understand the "Trust" will need to file taxes for 2021 and an EIN has been assigned to the account. It is my understanding that the Feds allow the "Closing Costs" to be deducted on the Federal Tax Return, which, after the deduction, in this case amounts to about $5000.00 taxable. Since the Trust made no other income, I understand Federal Tax liability for the Estate will be little, if any.
My question is does the State of California have the same or similar deduction for capital gains on a sold inherited home or will the entire $80,000 be treated as "income tax" or some other tax to the Estate in California?
Thank you.
