CANVAS QUIZ: Chapter 11

Question 1

Who is the county officer with the responsibility of determining the assessed valuation of land, improvements, and personal property used in business?

Answer 1

b. the county assessor.

Question 2

In California, annual property tax increase is limited to:

Answer 2

c. 2.00%

Question 3

Escrow prorates property taxes using:

Answer 3

d. the seller’s tax bill.

Question 4

The primary responsibility for disclosure of any Mello-Roos bonds lies with:

Answer 4

a. the seller

Mello-Roos Liens are municipal bonds issued to fund streets, sewers, and other infrastructure needs before a housing development is built.

Question 5

Which of the following can be deducted from personal taxes (on a personal residence)?

Answer 5

• interest paid
• property taxes
• prepayment penalties

Question 6

Which of the following can be depreciated for tax purposes?

a. only the buildings or other improvements on income, trade, or business property.
b. only the buildings or other improvements on residential property
c. the land and the buildings on residential property
d. the land and the buildings on income, trade or business property

Answer 6

a. only the buildings or other improvements on income, trade, or business property.

Question 7

Income tax rates are an example of _____ taxes.

Answer 7

b. progressive

Question 8

Taxes where the rates increase as the amount to be taxed increases are an example of:

Answer 8

c. progressive taxes.

Question 9

If property taxes are not paid on or before June 30, the property is sold to the state, which starts the running of the redemption period that lasts _____ years:

Answer 9

a. five

Question 10

Every time a property is transferred (sold) it is reassessed and a “change of ownership statement” must be filed with the County Assessors Office within:

Answer 10

b. 45 days.

Question 11

The sales of real estate in which the payments for the property extend over more than one calendar year is a(n):

Answer 11

b. installment sale.

Question 12

In a 1031-Exchange, “boot” is defined as:

Answer 12

a. cash or debt relief.

Question 13

Capital gains are taxed at a _____ rate than ordinary income.

Answer 13

a. lower

Question 14

Building depreciation for income producing property tax purposes is:

a. NOT based on actual physical depreciation.
b. based on the accounting method of depreciation.
c. calculated on the useful life of the property.
d. all of the above.

Answer 14

d. all of the above.

Question 15

Under IRS Section 1031, any real property held for investment that can be exchanged for another investment property is referred to as:

Answer 15

c. like-kind property.

Question 16

Taxes that use the same rate no matter how much is earned are referred to as _____ taxes.

Answer 16

b. regressive

Question 17

An example of a regressive tax is the _____ tax:

Answer 17

c. sales

Question 18

The buyer and broker do not have to see that 10 percent of the sales price is held in escrow for the IRS if:

a. the property is non-residential.
b. the residential property is < $300,000
c. the seller signs an affidavit of non-foreign status.
d. all of the above.

Answer 18

d. all of the above.

Question 19

State and local tax (SALT) deductions are limited on property, state, and local income or sales taxes to what amount?

Answer 19

d. $10,000

Question 20

The biggest advantage of the Opportunity Zone program (investing in struggling communities) is that the value of new investment will become tax free in _____ years.

Answer 20

b. 10