Unit 18 Key Terms

Question 1

adjusted basis

Answer 1

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

Question 2

ad valorem

Answer 2

Latin phrase meaning “according to the value”.

Question 3

assessed value

Answer 3

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

Question 4

assessment limitation (SOH benefit)

Answer 4

The accumulated difference between the assessed value and the market value of a homestead property due to limit on increases in the assessed value.

Question 5

boot

Answer 5

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

Question 6

capital gain

Answer 6

The profit(or loss) from the sale of an asset, including real property.

Question 7

debt service

Answer 7

the amount of money needed to meet the periodic payments of principal and interest on a loan that is being amortized.

Question 8

depreciation

Answer 8

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

Question 9

exempt properties

Answer 9

Properties that have been decreed to be excluded from taxation or claim by others.

Question 10

Green Belt Law

Answer 10

Legislation that authorizes county property appraisers to assess land used for agricultural purposes according to its current value as agricultural land.

Question 11

immune properties

Answer 11

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

Question 12

installment sale

Answer 12

The seller receives the proceeds from the sale in periodic payments over time.

Question 13

just value

Answer 13

The fair market value.

Question 14

like-kind exchange

Answer 14

An exchange of real property held for investment for another property held for investment that qualifies for deferment of takes from gain on the sale.

Question 15

mill

Answer 15

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

Question 16

special assessment

Answer 16

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

Question 17

tax rate

Answer 17

The percentage of value that is used to determine the amount of tax to be levied against each individual unit of property; ad valorem(according to the value).

Question 18

taxable income

Answer 18

Gross income minus tax deductions; net operating income plus reserve for replacements minus financing costs and allowable depreciation.

Question 19

taxable value

Answer 19

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

Question 20

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

Answer 20

adjusted basis

Question 21

Latin phrase meaning “according to the value”.

Answer 21

ad valorem

Question 22

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

Answer 22

assessed value

Question 23

The accumulated difference between the assessed value and the market value of a homestead property due to limit on increases in the assessed value.

Answer 23

assessment limitation (SOH benefit)

Question 24

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 24

boot

Question 25

The profit(or loss) from the sale of an asset, including real property.

Answer 25

capital gain

Question 26

the amount of money needed to meet the periodic payments of principal and interest on a loan that is being amortized.

Answer 26

debt service

Question 27

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

Answer 27

depreciation

Question 28

Properties that have been decreed to be excluded from taxation or claim by others.

Answer 28

exempt properties

Question 29

Legislation that authorizes county property appraisers to assess land used for agricultural purposes according to its current value as agricultural land.

Answer 29

Green Belt Law

Question 30

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

Answer 30

immune properties

Question 31

The seller receives the proceeds from the sale in periodic payments over time.

Answer 31

installment sale

Question 32

The fair market value.

Answer 32

just value

Question 33

An exchange of real property held for investment for another property held for investment that qualifies for deferment of takes from gain on the sale.

Answer 33

like-kind exchange

Question 34

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

Answer 34

mill

Question 35

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

Answer 35

special assessment

Question 36

The percentage of value that is used to determine the amount of tax to be levied against each individual unit of property; ad valorem(according to the value).

Answer 36

tax rate

Question 37

Gross income minus tax deductions; net operating income plus reserve for replacements minus financing costs and allowable depreciation.

Answer 37

taxable income

Question 38

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

Answer 38

taxable value