Is CA-541 Necessary for my situation?

[Mateo101]

My mom passed away early October 2024. My brother and I inherited her home (50/50 via trust) and then sold/closed on the house about 2 weeks after her death in October 2024. I am the trustee of her trust, and I completed form 1041 to realize a capital loss for the eligible selling costs for her home. 

I produced 2 K-1s to split the capital loss 50/50 with my brother.

The trust had no income and I closed out the trust by distributing all the assets in December of 2024.

My question is: Do I need to file CA-541 or can I skip it since the trust had no income?

[RobertB4444 · Accepted solution]

Yes, you must file form CA-541 if the gross income for the year is greater than $10,000 regardless of what the net income is.  

Here are the rules for who must file CA-541.

@Mateo101 

[Mateo101]

Thanks @RobertB4444 , so does the fact that we inherited the home outright imply that we received income?

[RobertB4444 · Accepted solution]

It does.  You received the sale price of the home as gross income.  The net income is negative so you won't owe any taxes.  But California expects a return.

@Mateo101