Real Property Tax and Tax Aspects of Real Estate Flashcards
For tax purposes, one can depreciate which of the following:
I. Land
II. Improvements
A) I only
B) II only
C) Both I and II
D) Neither I nor II
B) II only
II. Improvements
Land is not a wasting asset.
Mr. and Mrs. Lewis sold their principal residence of 4 years for $150,000 more than they paid for it. At the end of the year when they pay their taxes, what will they have to pay on that profit?
A) Capital gains tax
B) Ordinary income tax
C) No tax
D) Gross Excise tax
C) No tax
No tax provided his gain was less than $500,000
Under Hawaii’s property tax system, which of the following is true?
I. Assessed valuation fo 100% is assessed by the individual counties
II. The tax rate is set by the state
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
I. Assessed valuation fo 100% is assessed by the individual counties
In regards to home exemption in Hawaii:
I. $100,000 deduction for those 64 or under
II. The exemption applies to investment property in the state
A) I only
B) II only
C) Both I and II
D) Neither I nor II
A) I only
I. $100,000 deduction for those 64 or under
Real property taxes are determined:
I. On an ad valorem basis
II. According to value
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
I. On an ad valorem basis
II. According to value
“according to value”
Mrs. Peiretti sells her home for $340,000. She owned and resided in this house for eight years and made a profit of $50,000. When she sells her home, what will her capital gains taxes be?
A) $500 tax
B) $1,000 tax
C) No tax
D) $1,000 tax deferred over 5 year period
C) No tax
No tax gains of $250,000
Which is used as a basis for tax assessment?
I. Land
II. Building
A) I only
B) II only
C) Both I and II
D) Neither I nor II
C) Both I and II
I. Land
II. Building
An investor who is retired would be most interested in:
A)Future depreciation from income
B) Gross income
C) rental income
D) Net spendable income
D) Net spendable income
Which of the following is true?
I. If taxes are delinquent, property will be taken by the government by escheat
II. Real property assessment for tax purposes is determined by the county
A) I only
B) II only
C) Both I and II
D) Neither I nor II
B) II only
II. Real property assessment for tax purposes is determined by the county
The federal income tax allows an investor to gradually write off his original investment. What method is used?
A) Exchanges
B) Installment buying
C) Depreiation
D) Land Contract
C) Depreiation
In order to defer payment of a portion of federal income tax on recognized gain, payment on an installment sale must not exceed what percent of the total price in the year of the sale?
A) 30%
B) 35%
C) 40%
D) No limit
D) No limit
“Boot” is a factor to be taken into consideration in a:
A) Transfer by conditional sales contract
B) Percentage lease on commercial property
C) Purchase of FHA loans by FNMA
D) Tax deferred exchange
D) Tax deferred exchange
Which of the following problems associated with home ownership would be reduced to a considerable extent by a system of trade0ins in the real estate market:
A) Foreclosure risk
B) Legal risk
C) Neighborhood risk
D) Liquidity risk
D) Liquidity risk
“Boot” is the:
A) Same as equity
B) Difference in value between the two properties traded
C) Difference in equity between two properties traded
D) The amount that is due to a maturity date of a partially amortized note
C) Difference in equity between two properties traded
Which of the following statements concerning exchanges of real property is true?
A) They are always tax free
B) Tax must be immediately paid on any gain
C) They are tax favored
D) They are unlawful
C) They are tax favored
