topic California tax on sale of inherited property in State tax filing

California tax on sale of inherited property

parthaca — Tue, 24 Feb 2026 07:25:37 GMT

I am a California resident. The sale of an inherited property in India, held for over 10 years, resulted in capital gains. I paid capital gains taxes in India. This capital gain has to be declared on the federal return but I can take a foreign tax credit for taxes paid in India. My question is about California state tax return. California treats capital gains as regular income. So I would have to declare these gains as income. What is not clear if there is a provision to take credit for taxes paid in India as in the federal return. There is mention of credit for taxes paid in other states here: https://www.ftb.ca.gov/forms/2022/2022-540-s-instructions.html but no mention of foreign tax. Is there some other provision to take advantage of taxes paid to other jurisdictions in California?

Re: California tax on sale of inherited property

Anonymous_ — Mon, 11 Sep 2023 15:03:51 GMT

@pk ?

Re: California tax on sale of inherited property

pk — Mon, 11 Sep 2023 19:20:09 GMT

@parthaca , Namaste.

Unfortunately most US states do not recognize the "double Taxation" clause of US-Tax Treaties. Thus you are left with the double taxation when a state taxes world income but does not recognize taxes paid to another country. California has no recognition of taxes paid to another country. My suggestion would be call the California FTB and may be enough people call, they will recognize this issue .

Namaste ji