Section 18 Multiple Choice Flashcards
Heathcliff owns a property that was assessed to have a just value of $350,000. He is homesteaded with no other exemptions. The county tax is 6 mills, the city tax is 6.5 mills, and the school tax is 7 mills. How much would Gary owe in property taxes?
$3,750
$2,275
[A] $6,025
$5,850
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[Section 18A, Slides 39-41] $350,000-$50,000=$300,000×.0125 (6 mills+6.5 mills=12.5 mills)=$3,750; $350,000-$25,000=$325,000×.007 (7 mills)=$2,275; $3,750+$2,275=$6,025
You own a residential investment property that was purchased at $291,000. The land associated is valued at $73,000. Using the IRS straight line method which statement is correct?
The depreciable basis will be $291,000 depreciated over 27.5 years.
The depreciable basis will be $291,000 depreciated over 39 years.
[A] The depreciable basis will be $218,000 depreciated over 27.5 years.
The depreciable basis will be $218,000 depreciated over 31 years.
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[Section 18D, Slides 27 & 32]
The established useful asset life for nonresidential income-producing property under the IRS code is what number of years?
15.5
27.5
31
[A] 39
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[Section 18D, Slide 32]
Frank and Mary own a homesteaded home together with an assessed tax value of $515,000. Frank was in an accident and lost both his legs leaving him totally and permanently disabled. How much will their exemption be for county tax?
$515,000
[A] $50,500
$51,000
$55,500
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[Section 18B, Slides 20 & 65]
Terry is a widower who is permanently disabled. His homesteaded property has an assessed value of $260,000. What is his taxable value for school taxes?
[A] $234,000
$259,000
$229,500
$0
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[Section 18B, Slides 20, 65, 66] $260,000 - $25,000 regular exemptions - $500 widower exemption - $500 disability = $234,000
What is another name for a land contract?
Vendor’s lien
[A] Contract for deed
Novation
Sales contract
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[Section 18D, Slide 54]
Rhonda was charged for paving in front of her house. She owned 100 linear feet which was being charged at $28 a linear foot. The city agreed to pay the first 25% of the cost. How much was Rhonda charged as a special assessment?
$2,100
[A] $1,050
$2,800
$350
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[Section 18C, Slides 9-13] 100×$28=$2,800×.75=$2,100÷2=$1,050
Carlotta decided to downsize from a property with a just value of $600,000 but had an assessed value of only 460,000. She bought a new home with a just value of $300,000. Using the Portability provision of the Save Our Home Benefit, what would be the taxable value of the new home for school taxes?
[A] $205,000
$230,000
$180,000
$300,000
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[Section 18B, Slide 53] $300,000/$600,000 = .5×$460,000 = $230,000 (adjusted value)-$25,000 (additional school tax exemption)= $205,000
Mr. Rogers knows that there are certain properties that are tax exempt. Knowing this piece of information, he knows that exempt properties include which one of the following types of property?
[A] Churches
Schools
Fire Stations
Air Force Base
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[Section 18B, Slide 12]
Patsy purchased an income residential property for $240,000. It cost her $7,200 in closing costs. $30,000 is the value of the land. What is the amount of the yearly depreciation for federal taxes?
[A] $7,898.18
$5,569.23
$7,374.55
$8,727.27
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[Section 18D, Slides 32 & 33] $240,000 + $7,200 = $247,200- $30,000 = $217,200÷27.5 = $7,898.18 allowable depreciation per year for federal taxes
Who ultimately is required by the IRS to collect and pay the Foreign Seller tax?
The Seller
[A] The Buyer
The Real Estate Agent for the seller
The Real Estate Agent for the buyer
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[Section 18C, Slide 73]
Homes in Audrey’s neighborhood increased in value by 5% last year while the consumer price index only increased by 4%. What’s the most that Audrey’s home assessed value can increase if her home was homesteaded?
5%
4%
[A] 3%
Whatever the property assessor decides.
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[Section 18B, Slide 90]
The Fields wanted to buy their first home. Mr. Field wanted to draw money out of their IRA, but Mrs. Fields was afraid of the tax consequences. What would their tax advisor most likely tell them?
They can pull out money penalty-free if used as the down payment on their first home, but they would forfeit their $500,000 capital gain exclusion if they do so
They can withdraw money out tax free of their IRA to use for any purpose as long as it is within 6 months of their closing date.
[A] They will experience many tax advantages including being able to deduct the interest on their mortgage, being able to withdraw the down payment penalty free from their IRA, and have up to $500,000 excluded from capital gains tax of their primary residence at the time of sale as long as they live in the home 2 of the 5 years prior to sale.
There are no tax advantages to purchasing a home.
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[Section 18C, Slides 46 & 47]
Brigg bought a house last year when he paid $5,000 in discount points. Over the past year he also paid $8,575 in mortgage interest, $6,200 in principal payments, $1,300 in property tax, $750 in mortgage insurance, $900 in property insurance, and $1,500 in maintenance. Which expenses are deductible from his federal taxes?
Homeowner’s insurance of $900, discount points of $5,000 and property taxes of $1,300
Mortgage insurance of $750, Property Insurance of $900 and Mortgage interest of $8,575
Maintenance expenses of $1,500 and principle payments of $6,200
[A] Discount Points paid of $5,000, mortgage interest of $8,575 and property taxes of $1,300
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[Section 18C, Slides 46, 49, & 61]
Pam’s home has an assessed value of $301,000. She qualifies for the Florida homestead exemption. The area she lives in has the following taxes: County tax rate is 8.6 mills, City tax rate is 4 mills and the school district tax rate is 6.1 mills. How much will the property taxes be in total?
$1,683.60
$3,162.60
[A] $4,846.20
$562.87
Question Feedback
[Section 18A, Slides 39-41] $301,000-$50,000=$251,000×.0126 (8.6 mills+4 mills=12.6 mills)=$3,162.60; $301,000-$25,000=$276,000×.0061 (6.1 mills)=$1,683.60; $3,162.60+$1,683.60=$4,846.20
