Is CA-541 Necessary for my situation?

Forum|Forum|1 year ago
January 20, 2025
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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?

TurboTax Business Windows

Best answer by RobertB4444

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

RobertB4444Answer

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

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Mateo101Author

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

RobertB4444

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

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