Option 1: Sell

• Clean break — no ongoing maintenance, property taxes, or landlord responsibilities

• Converts the asset to cash you can invest, divide, or use

• In most California inherited property cases, capital gains tax is minimal or zero due to the step-up in basis (more on that below)

• Timing matters — you’ll want to understand the current Orange County market before deciding when to list Selling makes the most sense when: heirs need liquidity, the property needs significant work, there are multiple heirs who can’t agree on long-term plans, or no one wants to be a landlord.

Option 2: Rent

• Generates monthly income and builds long-term equity

• Preserves the asset if you believe property values will continue to rise

• Gives you time to make a more deliberate decision about selling

• Requires property management — either your time or a management fee

• Triggers income tax on rental income, and ends the stepped-up basis clock for capital gains purposes Renting makes the most sense when: the property is in good condition, there’s a single decision-maker, and no one needs immediate cash from the estate.

Option 3: Keep (Move In or Hold)

• Emotionally meaningful, especially for a family home with deep roots

• May offer property tax benefits under Proposition 19 if you move in as a primary residence

• Preserves the family’s connection to the property

• Requires ongoing costs: mortgage (if any), taxes, insurance, maintenance

Keeping makes the most sense when: one heir wants to live there, finances support it, and all other heirs are in agreement.

Important: Proposition 19 (passed in 2020) significantly changed the rules around parent-tochild property tax transfers. If you’re thinking about keeping the home, talk to your CPA about the timeline and requirements — this affects your property tax bill in a major way.