Selling an inherited rental in Sacramento

The deed and the estate plan decide who signs, and that decides how fast you can sell.

Inherited rental held in a living trust

If the house was in a revocable trust, the successor trustee named in it can sell without court. The trustee must send a notice to the beneficiaries and heirs (Probate Code 16061.7), and anyone served has 120 days from that notice to contest the trust (16061.8).

Inherited rental passing to a surviving spouse

Property left to a surviving spouse passes without probate under Probate Code 13500. The spouse usually files a spousal property petition in the Superior Court (13650) so a title company will insure the sale. A transfer between spouses is also excluded from reassessment (Revenue and Taxation Code 63).

Inherited rental that has to go through probate

Otherwise the house goes through probate in Sacramento County Superior Court. California's small-estate shortcuts don't fit most rentals: the real property petition now goes up to $750,000 but only for the owner's primary residence, and the personal property affidavit stops at $208,850 (deaths on or after April 1, 2025). If there's no will, the intestate succession rules apply; a surviving spouse, for example, takes the deceased spouse's half of community property (Probate Code 6401).

Once the court issues letters, the executor (or administrator) can sell. How much the court is involved depends on the authority it granted under the Independent Administration of Estates Act.

Full IAEA authority: selling the inherited house by notice of proposed action

An executor with full authority can sell real property (Probate Code 10511) after sending heirs a notice of proposed action at least 15 days before acting (10586). The court confirmation rules, including the 90% appraisal floor, don't apply (10503). If an heir objects in writing, the sale has to go through court confirmation instead (10589).

Court confirmation of a probate real estate sale

An executor with limited authority, or one facing an objection, needs a confirmation hearing (10501). The offer must be at least 90% of an appraisal made within the past year (10309), and at the hearing anyone can overbid: the first overbid has to beat the accepted offer by 10% of the first $10,000 plus 5% of the rest (10311). On a $470,552 offer that's $1,000 plus $23,028, so the opening overbid is at least $494,580. A confirmation sale puts a court date on the timeline, which is a reason to ask for full authority when the petition is filed.

Probate timeline and statutory fees on a Sacramento estate

California's courts say formal probate typically takes 9 to 18 months. The executor and the attorney are each entitled to a statutory fee on the estate's gross value, mortgage ignored: 4% of the first $100,000, 3% of the next $100,000, 2% of the next $800,000 (10800 and 10810). On an estate made up of one house at Zillow's typical Sacramento value of $470,552, that's $12,411 each, $24,822 together, paid before the heirs see a dollar.

This is general information, not tax advice: run your own numbers with a CPA. Internal Revenue Code 1014 is why selling soon usually costs heirs little income tax.

Stepped-up basis on an inherited house (IRC 1014, IRS Pub 551)

Your basis is the house's fair market value on the date of death, or on the alternate valuation date if the executor elects it (IRS Publication 551). The gain built up while your parent owned it, and the depreciation they claimed on it as a rental, don't pass to you. Get a date-of-death appraisal to prove it.

Capital gains tax on inherited property in California

You only pay tax on the sale price above that stepped-up basis, minus selling costs. The IRS treats inherited property as held more than one year however long you've had it (Publication 544), so any gain gets long-term federal rates. California has no lower capital gains rate and taxes the gain as ordinary income (Franchise Tax Board). The rates and the 3.8% surtax are on our capital gains tax guide for California rentals.

A Sacramento example of the stepped-up basis

Say your mother bought the house decades ago for $150,000 and depreciated it as a rental. At her death it's worth $470,552. Had she sold it, she'd have owed tax on over $320,000 of gain plus the depreciation recapture. Your basis is $470,552, so a sale at that price soon after has no taxable gain, and selling costs can produce a small loss. Keep it ten years and sell for more, and the rise after her death is taxable to you.

Since February 16, 2021, Prop 19 limits the parent-child exclusion to a family home that was the parent's principal residence and becomes the child's. The Board of Equalization says plainly that a rental home passing from parent to child doesn't qualify. So an inherited rental is reassessed to market value, and if your parent bought it long ago, the new tax bill can be far higher than the old one.

That bill is the main cost of keeping it. Put the reassessed tax next to the rent before you decide anything, and if one of you plans to move in instead, ask the County Assessor about the family home exclusion first: the BOE sets a value limit and filing deadlines for it.

The owner's death doesn't end the lease. The estate or trustee, and later the heirs or a buyer, step into the landlord's place on the same terms.

Security deposit on an inherited rental

California's deposit law treats death like a sale: when the owner's interest ends "by sale, assignment, death" or otherwise, the deposit must either pass to the successor with written notice to the tenant or go back to the tenant with an itemized accounting (Civil Code 1950.5(i)). Find the deposit records early, because the buyer's escrow will ask for them.

AB 1482 after an inheritance

AB 1482's just-cause clock runs on how long the tenant has lived there, so a tenant past 12 months stays protected through the death and the sale. Check the lease for the single-family exemption notice, which some houses qualify for. Our AB 1482 guide for Sacramento covers the rules, and selling with the tenant in place covers showings and buyers.

Co-heirs who agree can sell, keep it together or have one buy out the others. When they can't, any of them can go to court, which is slow and costly for all of them.

Can you force the sale of an inherited property? Partition in California

Any co-owner of real property can file a partition action (Code of Civil Procedure 872.210). The court can divide the property or order it sold, and it orders a sale when the parties agree or when a sale is more equitable than splitting a single house (872.820).

Heirs' buyout rights under the Partition of Real Property Act

Since January 1, 2023, partitions of real property follow the Partition of Real Property Act unless every co-owner agrees otherwise in writing (874.313). The court sets the value, then co-owners who didn't ask for a sale get 45 days to elect to buy out those who did, at that value times their share (874.317). A sale is normally on the open market through a licensed broker (874.320).

Zillow's typical Sacramento value rose 2.1% in the five years to September 2026, while typical rent rose 14.6%. Keeping an inherited rental is a bet on income, so price both options before you choose: what the rental is worth with the tenant and vacant, and what it nets each month at the reassessed tax. Our checklist on whether to sell a rental walks through the rest, and Justin can run both prices for the estate when you're ready to talk about selling a Sacramento rental.