Inherited home in California and sold it in 2012 for $500,000. What taxes are due if I lived in it for three years?

If you are filing jointly with your spouse, for sure NO taxes are due.

If you are single, then I would need to know what it was valued at when the person who willed it to you died. More than likely, your total gain is NOT more than $250K, in which case there is also no tax due.

Under the above circumstances, you do not even have to report the sale on your tax return.