Legal Aspects of Real Estate: Q10/Chp 24-26

Question 1

1) A transmutation must be ________ to be effective against persons relying on the record title.
a. written and recorded
b. oral
c. published in a newspaper
d. All of the above

Answer 1

a. written and recorded

Question 2

2) ______ may be used to authorize one spouse to manage and control community property.
a. A revocable trust in which one spouse is the named trustee
b. A power of attorney
c. A limited partnership
d. All of the above

Answer 2

d. All of the above

Question 3

3) A revocable inter vivos (living) trust benefits real estate owners by:
a. distributing the owner’s estate without resorting to probate proceedings.
b. allowing the owners to avoid their creditors.
c. providing more favorable tax results than a will.
d. All of the above

Answer 3

a. distributing the owner’s estate without resorting to probate proceedings.

Question 4

4) A(n) ______ is required to establish a viable inter vivos (living) trust.
a. oral agreement
b. Declaration of Trust
c. Declaration of Consent
d. writing signed by the beneficiary only

Answer 4

b. Declaration of Trust

Question 5

5) A ___________ is a business which acts as an executor, administrator, guardian or conservator of estates, or as assignee, receiver, depositary or trustee by the appointment of the court or for any purpose permitted by law.
a. trust business
b. business trust
c. Franchise Tax Board
d. homeowners’ association (HOA)

Answer 5

a. trust business

Question 6

6) Adverse tax consequences make ___________ ownership and vesting of rental real estate infrequent.
a. tenants in common (TIC)
b. limited liability company (LLC)
c. corporate
d. partnership

Answer 6

c. corporate

Question 7

7) The conveyance of a co-owner’s TIC interest to another person conveys:
a. full fee ownership of the property.
b. equitable ownership of the property.
c. all the income and profits flowing from the property.
d. All of the above.

Answer 7

b. equitable ownership of the property.

Question 8

8) The ________ of co-owners while managing the investment determines whether a state law partnership relationship exists.
a. sharing of income and profits
b. interaction and coordinated conduct
c. tax bracket
d. All of the above.

Answer 8

b. interaction and coordinated conduct

Question 9

9) The alienation of property refers to its:
a. sale.
b. further encumbrance.
c. lease for a period exceeding one year.
d. All of the above

Answer 9

d. All of the above

Question 10

10) When a co-owner of investment real estate is classified by the Internal Revenue Service (IRS) as a partner, the real estate is considered to be owned by:
a. the co-owner only.
b. a tax partnership.
c. a non-taxable trust.
d. None of the above.

Answer 10

b. a tax partnership.