Vocabulary for Investment and Taxation

Question 1

purchase price plus value of capital improvement minus depreciation

Answer 1

Adjusted Basis

Question 2

original purchase price plus capital improvement

Answer 2

Adjusted Purchase Price

Question 3

sale price minus sale costs

Answer 3

Adjusted Sales Price

Question 4

actual price paid for property

Answer 4

Basis

Question 5

state laws regulating the sale of investment securities

Answer 5

Blue Sky Laws

Question 6

anything of value given to make up the difference in equities between two properties exchanged

Answer 6

Boot

Question 7

limits liability; pays taxes twice

Answer 7

C- Corp

Question 8

the taxable gain received from a capital assets

Answer 8

Capital Gain

Question 9

the loss realized from the sale of capital asset

Answer 9

Capital Loss

Question 10

a deduction taken for an investment

Answer 10

Depreciation (tax)

Question 11

accounting procedure used for investment;

Answer 11

Straight Line Depreciation

Question 12

the numer of years a property will contribute value to the land;can deduct 27.5 years on residential and 39 years for commercial

Answer 12

Economic Life

Question 13

Each partner is responsible and liable for total P&L

Answer 13

General Partnership

Question 14

the intangible value of a business due to the habit of patronage; a capital asset but not depreciable

Answer 14

Good Will

Question 15

a tax method of reporting only the amount of income received as it is received; seller carries back financing and money is paid over time; tax deferment strategy

Answer 15

Installment Sale

Question 16

using borrowed funds to finance investments with little or no personal cash invested; what you can borrow against; use a smaller investment to generate a larger rate of return

Answer 16

Leverage

Question 17

has general mgr, limits liability but no decision making; responsible only for $ investment

Answer 17

Limited Partnership

Question 18

in a tax deferred exchange, the assumption of a mortgage of lesser value than an existing mortgage; debt relief is taxable; like kind properties in tax deferred exchanges

Answer 18

Mortgage Relief

Question 19

when selling a principal residence there is no tax up to $250K indiv. and $500K married

Answer 19

Principal Residence

Question 20

a corporation with a minimum of 100 investors and %95 of profit passes to shareholder

Answer 20

REIT (Real Estate Investment Trust)

Question 21

no more than 100 U investors, taxed once and limits liability; can write off any loss

Answer 21

S- Corp

Question 22

personal liability but all decision making

Answer 22

Sole Proprieter

Question 23

multiple ownership of an investment as in a REIT; as a group you may buy securities

Answer 23

Syndicate

Question 24

a real estate investment that postpones the paying of taxes

Answer 24

Tax Deferment

Question 25

using investments to postpone payment of income tax

Answer 25

Tax Shelter

Question 26

wages from employer

Answer 26

W-2

Question 27

self employed

Answer 27

1099

Question 28

taxes on interest earned

Answer 28

1099 Int

Question 29

partnership income

Answer 29

K1