Chapter 13 - Taxation of Real Estate

Question 1

Real property taxes are also what?

Answer 1

Ad valorem taxes (proportional to real property); according to value

Question 2

________ ________ assesses; __________ _______ __ ________ sets tax rate.

Answer 2

County accessor; County Board of Supervisors

Question 3

Proposition ___ limits the amount of taxes to a maximum of 1% of the March 1, 1975, market value of the property plus the cumulative increase of 2% in mark value each year thereafter.

Answer 3

Proposition 13

Question 4

The city or county’s fiscal year starts and ends?

Answer 4

July 1st to June 30th.

Question 5

NDFA

Answer 5

No Darn Fooling Around

Question 6

Property taxes become a _______ on real property on January 1st.

Answer 6

lien

Question 7

Rebates for 62 years or older or disabled people must be filed from:

Answer 7

May 16th to August 31st

Question 8

A veteran is entitled to an annual _________ property tax exemption against the assessed value of one property.

Answer 8

$4,000

Question 9

Federal gift tax is while _____

Answer 9

while living

Question 10

Federal estate tax is _____.

Answer 10

after death

Question 11

The gift tax law provides for an $________ annual exemption per donee.

Answer 11

$11,000

Question 12

A federal estate tax return must be filed for the estate of every resident of the United States whose gross estate exceeds $1,000,000 ($1,500,000 in 2004, $2,000,000 in 2006) in value at the date of death.

Answer 12

????

Question 13

The California State Inheritance Tax and the California State Gift Tax were repealed on ________.

Answer 13

June 8, 1982

Question 14

When selling a personal residence, the seller can deduct up to $250,000 ($500,00 if married) of any capital gain. Can be used every ________.

Answer 14

2 years; but you have to have lived in the house for 2 out of the last 5 years.

Question 15

Depreciation schedule for residential is a minimum of _____ years (straight-line)

Answer 15

27.5 years

Question 16

Commercial improvements depreciation schedule:

Answer 16

minimum 39 years; straight line

Question 17

A tax that charges a higher percentage of income as income rises.

Answer 17

Progressive tax

Question 18

The rate that the next dollar earned puts you into.

Answer 18

Marginal tax rate

Question 19

Use the same rate no matter how much is spent or earned. An example is sales tax.

Answer 19

Regressive tax

Question 20

What is “adjusted cost basis?”

Answer 20

Is the base cost, plus capital improvements, minus depreciation and sale expenses.

Question 21

The sale of real estate in which the payments for the property extend over more than one calendar year.

Answer 21

Installment sale

Question 22

A transfer of real estate where one party trades proper for another’s property.

Answer 22

Exchange

Question 23

A city may levy a tax against real estate brokerage firms, which is based upon the gross receipts, through which tax?

Answer 23

Business License Tax; usually starts around $100.

Question 24

_____ tax is a tax on only tangible personal property.

Answer 24

Sales tax; max penalty of $35

Question 25

A buyer is protected from ____________’s liability by obtaining a “clearance receipt” from the State Board of Equalization.

Answer 25

successor’s liability