Chapter 11 - Taxation of Real Estate

Question 1

who is the County officer who has the responsibility of determining the assessed valuation of land, improvements, and personal property used in business

Answer 1

the County Assessor

Question 2

anything that increases the usefulness of the structure, such as the addition of a bedroom or bathroom, is an example of

Answer 2

a taxable alteration

Question 3

a rough estimate of property tax is approximately

Answer 3

1.25 per cent of the sales price

Question 4

in California, the annual property tax increase is limited to

Answer 4

2%

Question 5

escrow prorates property taxes using a

Answer 5

using the sellers tax bill

Question 6

the primary responsibility for disclosures of any Mello-Roos Bond lies with

Answer 6

the seller

Question 7

which of the following can be deducted from personal taxes

Answer 7

property taxes on personal residence, interest paid on personal residence, and prepayment penalties paid on a personal residence

Question 8

which of the following can be depreciated for tax purposes

Answer 8

only the building or other improvements on income, and trade or business property

Question 9

income tax rates are an example of

Answer 9

Progressive taxes

Question 10

the sales of real estate in which the payments for the property extend over more than one calendar year is a

Answer 10

installment sale

Question 11

taxes were the rates increase as the amount to be taxed increases are an example of

Answer 11

Progressive taxes

Question 12

in a 1031 exchange, boot is defined as

Answer 12

cashier mortgage relief

Question 13

inventory of property is held primarily for sale to customers is referred to as

Answer 13

dealer property

Question 14

which of the following does not qualify for tax-free Exchange

Answer 14

dealer property

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

like-kind property

Question 16

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

Answer 16

regressive taxes

Question 17

an example of a regressive tax is the

Answer 17

sales tax

Question 18

the broker does not have to see that 10% of the sales price is held in escrow if

Answer 18

the residential property is less than $300,000, the property is non-residential, the seller signs an Affidavit of non foreign status

Question 19

which of the following is a factor in classifying a broker as a dealer

Answer 19

frequency of sales, dollar volume, and subdivision activity

Question 20

if the seller is a foreigner or a resident of another state, California tax collection requirements put the burden on

Answer 20

the buyer