Q1: I am in the process of selling my father's home who is a widower. The home is in California and his wife died ~11 years ago. My understanding from his lawyer is that as CA is community property state he will get the step up for the exemption for the home. I wanted to a) verify that this is the case and b) on his taxes (which I'll do for him in TT) do I simply apply the $500K exemption? The home is worth ~$800K and there is a $400K reverse mortgage. After fees and other costs I expect the proceeds to be ~$335K so I do not see a capital gains event but wanted to check with the experts.
Q2: My wife inherited a home along with her two siblings. The home is in CA, paid for and worth ~$1.2M. The family will sell the home soon and my understanding is that there will be no inheritance tax event as the proceeds will be well below the Federal $12.92M exemption and CA has no inheritance tax. a) please verify this and b) where in TT do I account for the inheritance (split three ways amongst the siblings) for the home?
