If you owned the house as joint tenants with your sister, then you will need to prepare and file an Affidavit of Death of Joint Tenant with an original death certificate attached, and then file it with the county recorder in your county. You will also need to prepare and file a Preliminary Change of Ownership Report with the Affidavit at the same time.
Many of these forms are available online, but you might want to consider using an attorney to assist you.
As for tax implications, here are a few:
Federal Estate Tax $0.00
No California inheritance tax.
Your real property tax bill will be subject to reassessment of the one-interest owned by your sister, which means that your half will retain the current tax bill, but the other half will be reassessed to current value. This means your property taxes will go up.
If you sell the property, you would also be entitled to have your sister's equity in the property as of the date of her death be scheltered from capital gains taxation under both the new tax law (which was made retroactive to the beginning of 2010), and likely under the 2010 law as well.
You should consider having the property appraised as of your sister's date of death to fix the value for capital gains income tax purposes should you decide to sell in the future. Consulting with a good estate planning attorney would be a good bet.Ask a similar question
Gnerally, since your sister includes her joint tenancy interest in her estate, you can get a partial step up in basis to the date of death value of the property for the 1/2 that you receive.
However, you should discuss this with your CA estates attorney to see if CA has any rules and presumptions that may trump this general tax concept.
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You will receive a partial step up in basis for your sister's share of the property. This will come into play if and when you ever sell the property. Other than that, there should be no other federal tax implications.
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The tax implications are to the cost basis of the property. You will get a partial step up in basis attributable to the interest of your sister as joint tenant. The cost basis for her share will be stepped up to the value at the time of her death. This stepped up basis will reduce any capital gains upon sale of the property, so your tax liabilities upon sale will be reduced.
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