Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

California Real Estate - Practice > Chapter 14 > Flashcards

Chapter 14 Flashcards

1
Q

What is Capital Gain?

A

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.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is Depreciation?

A

The ability to deduct expenses on improvements made to income producing property.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is Straight Line Depreciation?

A

A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is a Section 1031 Exchange?

A

A section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What is a Boot?

A

Cash received in a tax-deferred exchange.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Real estate agents should never provide tax advice to their clients…?
A. T (True)
B. F (False)

A

A. T (True)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q 
The first property tax bill is due on…?
A. November 10th
B  December 10th
C. February 10th
D. April 10th
A

B December 10th

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q 
This Proposition benefits citizens 55 and older…?
A. Proposition 11
B. Proposition 13
C. Proposition 60
D. Proposition 137
A

C. Proposition 60

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Proposition 90 is only available in participating counties…?
A. T (True)
B. F (False)

A

A. True

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q 
Owner occupied residential properties are entitled to a ………... homeowner’s tax exemption?
A. 2000
B. 5000
C. 7000
D. 10000
A

C. 7000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q 
The profit realized from the sale of real estate is known as a…?
A. Capital gain
B. Capital loss
C. Credit
D. Debit
A

A. Capital gain

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q 
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…?
A. Appreciation
B. Depreciation
C. Credit
D. Debit
A

B. Depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q 
A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement is known as…?
A. Straight line depreciation
B. Term depreciation
C. Adjustable depreciation
D. Consistent depreciation
A

A. Straight line depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q 
A section of the U.S. Internal Revenue Service Code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes is known as…?
A. Section 12-A Exchange
B. Section 11 Exchange
C. Section 1031 Exchange
D. Section 90 Exchange
A

C. Section 1031 Exchange

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q 
Cash received in a tax-deferred exchange is known as…?
A. Capital gain
B. Asset
C. Conversion
D. Boot
A

D. Boot

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q 
Residential property is considered to have a useful life of…?
A. 27.5 years
B. 29 years
C. 35 years
D. 39 years
A

A. 27.5 years

17
Q 
Non-residential property is considered to have a useful life of…?
A. 27.5 years
B. 29 years
C. 35 years
D. 39 years
A

D. 39 years

18
Q 
The second property tax bill is due on…?
A. November 10th
B. December 10th
C. February 10th
D. April 10th
A

D. April 10th

19
Q 
For depreciation purposes, the value of land can be determined using which of the following methods…?
A. Assessed value method
B. Appraisal method
C. Contract method
D. All of the above
A

D. All of the above

20
Q 
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…?
A. Depreciated basis
B. Net basis
C. Adjusted basis
D. Gross basis
A

C. Adjusted basis

21
Q

Boot is considered taxable income…?
A. T (True)
B. F (False)

A

A. T (True)

22
Q 
A personal residence is also known as a…?
A. Primary residence
B. Secondary residence
C. Vacation residence
D. Investment property
A

A. Primary residence

23
Q

A time-share is an example of a secondary residence…?
A. T (True)
B. F (False)

A

A. T (True)

24
Q 
Single owners are exempt from paying capital gains taxes on the sale of their primary residence up to…?
A. 250000
B. 500000
C. 600000
D. 1000000
A

A. 250000

25
Q 
Married couples are exempt from paying capital gains taxes on the sale of their primary residence up to…?
A. 250000
B. 500000
C. 600000
D. 1000000
A

B. 500000

26
Q 
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?
A. 1
B. 2
C. 3
D. 4
A

B. 2

27
Q 
An item that adds value to a property, adapts the property to new users, or prolongs the life of the property is known as a…?
A. Value improvement
B. Income improvement
C. Capital improvement
D. Routine improvement
A

C. Capital improvement

28
Q

Landscaping is an example of a capital improvement…?
A. T (True)
B. F (False)

A

A. T (True)

29
Q 
According to Proposition 13, the maximum State real estate tax is ………. of the fair market value of a property?
A. 1 (% percent)
B. 3 (% percent)
C. 5 (% percent)
D. 10 (% percent)
A

A. 1 (% percent)

30
Q 
Proposition 13 was enacted in…?
A. 1964
B. 1968
C. 1978
D. 1991
A

C. 1978

31
Q 
Real estate taxes are calculated as a ………... of a property’s full cash value…?
A. Flat fee
B. Deductible
C. Percentage
D. Division
A

C. Percentage

32
Q 
Property taxes in California are reassessed as of the…?
A. 1st of every year
B. End of every year
C. 2nd quarter of every year
D. Sale date of a property
A

D. Sale date of a property

33
Q

Real estate taxes are considered a tax deductible for homeowners…?
A. T (True)
B. F (False)

A

A. T (True)

34
Q

A homeowner can have their property reassessed…?
A T (True)
B. F (False)

A

A T (True)

35
Q 
Which of the following allows property to be transferred between family members without being taxed on the first million dollars of market value…?
A. Proposition 11
B. Proposition 58
C. Proposition 60
D. Proposition 90
A

B. Proposition 58

California Real Estate - Practice (15 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions