Ch 14 CA RE Practice Flashcards
Which of the following allows property to be transferred between family members without being taxed on the first million dollars of market value…? AProposition 11 BProposition 58 CProposition 60 DProposition 90
B Proposition 58
Proposition 13 was enacted in…? A1964 B1968 C1978 D1991
1978
Landscaping is an example of a capital improvement…?
AT (True)
BF (False)
true
In order to qualify for the primary residence capital gains tax exemption, the owner must have lived in the house for ………. out of the previous 5 years? A1 B2 C3 D4
2
A time-share is an example of a secondary residence…?
AT (True)
BF (False)
true
Boot is considered taxable income…?
AT (True)
BF (False)
(True)
The value of property used to determine the amount of gain or loss realized by an owner upon sale of the property is known as the…? ADepreciated basis BNet basis CAdjusted basis DGross basis
Adjusted basis
For depreciation purposes, the value of land can be determined using which of the following methods…? AAssessed value method BAppraisal method CContract method DAll of the above
All of the above
What refers to the original cost or other basis of property, reduced by depreciation deductions and increased by capital expenditures?
Adjusted Basis or Adjusted Tax Basis
Non-residential property is considered to have a useful life of…? A27.5 years B29 years C35 years D39 years
39 years
Residential property is considered to have a useful life of…? A27.5 years B29 years C35 years D39 years
A 27.5 years
Cash received in a tax-deferred exchange is known as…? ACapital gain BAsset CConversion DBoot
Boot
The amount of decrease in value of an asset that is allowed in computing the value of the property for tax purposes is known as…? AAppreciation BDepreciation CCredit DDebit
B Depreciation
Owner occupied residential properties are entitled to a ………... homeowner’s tax exemption? A2000 B5000 C7000 D10000
C 7000
Proposition 90 is only available in participating counties…?
AT (True)
BF (False)
(True)
This Proposition benefits citizens 55 and older…? AProposition 11 BProposition 13 CProposition 60 DProposition 137
C Proposition 60
The agent is considered an __a__ of the broker. The broker must carry __b__ in case something happens. The IRS see the agent as an __c__. When you have a commission check, set up a tax saving account to put __d__% of the commission check into the account?
a) employee
b) worker’s compensation
c) independent contractor
d) 20%
What is the loss of value of property brought about by age, physical deterioration or functional or economic obsolescence?
Depreciation
Economic depreciation is the same as tax deprecations?
False
Economic Depreciation results from the following 3 things?
Physical Deterioration
Functional Obsolescence
Economic Obsolescence
what is the loss in value caused by unrepaired damage or inadequate maintenance?
physical deterioration
The loss in value due to resulting from functional
problems caused by age or poor design?
functional obsolescence
A loss in value due to factors away from the subject property but adversely affecting the value of the subject property
ECONOMIC OBSOLESCENCE
A term used for accounting purposes to identify the amount of the decrease in value of a property that is allowed for tax purposes
tax depreciation
What prop allows spouses or domestic partner, including kids, grandkids, step kids transfer to one another up to $1MM market value without reassessment property tax?
prop 58
What prop allows 55+ to downsize and a taxpayer can transfer current base year tax to a replacement?
Both property must be in the same county, 55+, original house qualifies for the transfer, new home equal or lower
60 prop
What prop allows other home sellers/buyers to go to other counties from participating counties such as Alameda, LA, OC, Santa Clara, San Diego, Ventura?
prop 90
What is at resale of a capital item, the amount by which the net sale proceeds exceed the adjusted cost basis (book value). Used for income tax computations. Gains are called short or long term based upon length of holding period after acquisition. Usually taxed at lower rates than ordinary income.
capital gain
What is The ability to deduct expenses on improvements made to income producing property
Depreciation
