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22 Cards in this Set

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  • Back
Which the following would not be considered an income tax deduction?

a. Tax depreciation on your personal residence
b. Interest on a second home
c. Interest paid on the loan
d. Property taxes
a. Tax depreciation
When figuring the capital gain from the sale of a property, which of the following would lower your gain?

a. Tax depreciation
b. Original cost
c. Appreciation
d. Capital improvements
d. Capital improvements
If a party wants to maximize leverage, he should:

a. Pay cash
b. Have the highest loan to value ratio
c. Have a low loan to value ratio
d. Diversify into many investments
b. Have the highest loan to value ratio
You own a duplex and rent one unit. Which of the following is true?

a. You may deduct the expenses from both
b. You may deduct the expenses only for the rented unit
c. You may deduct the expenses only for the unit owner occupied
d. You may not deduct the expenses for either unit
b. You may deduct the expenses only for the rented unit
Cash on cash return would involve which of the following concepts?

a. Economic depreciation
b. Adjusted gross income
c. Leverage
d. Economic life
c. Leverage
If property is to be depreciated, it must be:

a. Fee simple ownership
b. Unimproved
c. Improved
d. Profit making venture
c. Improved
The basis of a personal residence is affected by which of the following:

a. Maintenance
b. Patio addition
c. Loan pay off
d. Interest deductions
b. Patio addition
To have a qualified tax deferred exchange, which of the following would be required:

a. The exchange needs to occur no later than 10 days after close of escrow
b. Properties must not differ in value
c. Properties are held for investment
d. Property taxes paid
c. Properties are held for investment
When a person sells an income producing property and the taxable gain is being calculated, which of the following would the seller be most interested in:

a. Debt service
b. Capital improvements
c. Repair and maintenance
d. Property taxes paid
b. Capital improvements
If you were a passive investor in a limited partnership, you would be entitled to all of the following information and rights except:

a. K-1 tax reporting form
b. Management and control
c. Annual accounting
d. Sharing in partership losses
b. Management and control
Which of the following listed below would be the best example of a progressive form of taxation:

a. Installment sale
b. Income tax
c. Property tax
d. Sales tax
b. Income tax
A borrower is required to put 10% down for the purchase of a property. The 10% down would be considered?

a. Equity
b. Boot
c. Tax shelter
d. Leverage
a. Equity
When a corporation owns property as tenants in common with other corporations, how are they most likely taxed?

a. In severalty
b. Pro rata share
c. Joint and several
d. Equal percentages
b. Pro rata share
When an exchange of real property takes place, which of the following items listed below would trigger a taxable event:

a. Trading commercial property for an apartment building
b. Assuming a loan of less value
c. Using a delayed exchange
d. Like for like exchange with no boot
b. Assuming a loan of less value
What form of real estate financing would fall under federal securities laws?

a. FHA
b. Agreement for sale
c. Conventional loan under 80%
d. REIT
d. REIT
In order to qualify for a $250,000 tax-free exemption, which of the following statements are true?

a. Both husband and wife must be 55 years or older
b. One must have lived in the house for 2 years
c. Husband and wife both have a $500,000 exemption
d. The exemption would also apply to rental investment properties
b. One must have lived in the house for 2 years
When a seller pays a commission, which of the following is correct?

a. The commission is considered an expense of sale
b. The commission is not deductible as an expense of sale
c. The commission would reduce the buyer's basis
d. The commission must be amortized over 27 1/2 years
a. The commission is considered an expense of sale
The basis on a new personal residence will be increased by which of the following?

a. Physical depreciation
b. Tax credits
c. Acquisition costs
d. Discount point
c. Acquisition costs
Which of the following would not affect the basis of a property:

a. Tax depreciation
b. Property repairs
c. Capital improvements
d. Original price
b. Property repairs
Cash on cash return is:

a. Money received on equity
b. Money received on loan
c. Money received on taxable income
d. Money received on taxable profit
a. Money received on equity
Cash on cash rate of return is measured against which of the following?

a. Purchase price
b. Leverage
c. Equity
d. Appraised value
c. Equity
A residential tenant has improvements done to the property and the economic life is 20 years, what is teh annual straight-line depreciation?

a. 4%
b. 5%
c. 7%
d. 8%
b. 5%