Chapter 31 Flashcards
Bases is decreased by …
Easements
Easements is a legal situation when the title to a specific peace of land belongs to one person , but another person or organization is given the right to use that land for a distinct purpose.
What I come taxes do residents of NYC have to pay ?
Federal , state , and city income tax.
Sections 1031 exchanges are …
Tax deferred.
Section 1031 is a provision of the IRS that allows business or investment property owners to defer federal taxes on some exchanges for real estate.
LIKE KIND EXCHANGES are section 1031 exchanges.
A Low-Income housing credit program provides _____ in federal income tax liability for project owners who develop rental housing that serves low income housing with income up to 60% of area median income.
A dollar for dollar TAX CREDIT
Not to come confused with a tax deduction ….
The LIHC program (low income housing CREDIT) provides a dollar for dollar reduction in federal income tax liabilities for project owners and ho develop rental housing that serves low income households with income up to 60% or the area median income.
New York non residents Kurt pay income tax for ____ income earned in New York City.
Investment
In NYC , in addition to a state income tax , there is a city income tax for the residents in the city and for non residents who earn income from NY investments.
Which of the following statements about points is true ?
A) A homeowner can never fully the full amount or points in the year they are paid.
B) In most cases , points paid to refinance a mortgage are deductible in full in the year they were paid.
C) Points paid on a second home can only be deducted over the life of the loan.
D) Points on home improvement loans are always fully deductible in the year they were paid.
C) Points paid on a second home fan only be deducted over the life of the loan.
Which of the following is NOT a current tax bracket ?
A) 7%
B) 10%
C) 28%
D) 33%
A) 7%
The 7 currant tax brackets DO NOT include 7%
In order to qualify for the tax - deferred exchange (also known as section 1031 exchange ) , how many days does an exchanger have to contract for the replacement property?
45 days
A month and a half
What is the maximum net capital loss that can be discreet annually ?
$3,000
A taxpayer can duct the net capital loss from taxable income in an amount of up to $3,000 annually , with amounts over that limit being carried forward to the next year.
The tax rate that applies to income is called the …
Marginal tax bracket
What are the two rules of the exclusion on capital gains for home owners ?
That the exclusion can be used once every two years and that the house was occupied by the seller 2 of the last 5 years.
The taxpayer relief act did not reduce taxes for ….
Real estate investments.
How long must an asset be held if the profit on its sale is a long term capital gain ?
1 year.
Which provision of the taxpayer relief act or 1997 allowed first time buyers to use IRA funds for a house purchase.
Retirement savings.
Income from rental activity is classified as …
Passive income.
Passive income , such as that from rental activity , is income from activities in which you as the investor does not materially participate.
