Taxes affecting real estate

Question 1

The owner’s original cost plus buying expenses plus capital improvements.

Answer 1

adjusted basis

Question 2

(tax) According to the value; in proportion to worth.

Answer 2

ad valorem

Question 3

Worth established for each unit of real property for tax purposes by a county property appraiser.

Answer 3

assessed value

Question 4

Money or other property that is not like-kind, which is given to make up any difference in value or equity between exchanged properties.

Answer 4

boot

Question 5

The profit from the sale of an asset, including real property.

Answer 5

capital gain

Question 6

A loss in value for any reason; a deduction for tax purposes.

Answer 6

depreciation

Question 7

Real property that is owned by a unit of government and is not subject that taxation.

Answer 7

Immune

Question 8

The fair market value.

Answer 8

just value

Question 9

A unit of money used to specify a property tax rate ($1 for each $1,000 of taxable value).

Answer 9

mill

Question 10

Property subject to taxation, but the owner is partially relieved of the burden.

Answer 10

partially exempt

Question 11

Taxes levied against properties to pay for all, or part of, improvements that will benefit the properties being assessed.

Answer 11

special assessments

Question 12

The assessed value less allowable exemptions resulting in an amount to which the tax rate is applied to determine property taxes due.

Answer 12

taxable value

Question 13

An investment that shields items of income or gain from payment of income taxes; a term used to describe some taxa advantages of owning real property (or other investment), including postponement or even elimination of certain taxes.

Answer 13

tax shelter

Question 14

3. The first step in protesting the assessed value of real property is to a. contact the county property appraiser or a representative. b. contact the county tax collector or a representative. c. contact the Value Adjustment Board. d. file suit against the Value Adjustment Board.

Answer 14

A

Question 15

8. In arriving at a just value for agricultural property, the highest and BEST use a. is not a factor b. of the property must be for agricultural purposes only. c. discourages speculative investing in agricultural land. d. encourages speculative investing in agricultural land.

Answer 15

A

Question 16

10. If a lot frontage is 100 feet, street paving costs are $40 per running foot, and the city will pay 25 percent of paving costs, what will be the assessment to the property owner? a. $1,000 b. $1,500 c. $3,000 d. $4,000

Answer 16

B

Question 17

19. Which item is NOT a deductible expense for an income-producing property? a. Depreciation b. Reserve for replacement c. Hazard insurance d. Mortgage interest

Answer 17

B

Question 18

20. A tax-sheltering real estate investment is one in which a. debt service is greater than net operating income. b. the secondary purpose is the productivity of the property. c. the primary purpose is reduction of personal taxable income. d. the amount of depreciation taken for tax purposes is greater than the actual depreciation of the property.

Answer 18

D