NYS Real Estate: Chapter 17 Quiz

If the depreciable basis for a single family residence is $2,750,000, what is the annual allowable depreciation, assuming a 27.5 economic lifespan...? a. $10,000 (Dollars) ' b. $2,750,000 (Dollars) c. $100,000 (Dollars) d. $275,000 (Dollars)

$100,000 (Dollars)

A commercial property has a depreciable basis of $2,225,000. Using the straight-line method, what is the allowable annual depreciation for the property...? a. $57,051.28 (Dollars) b. $162,646.45 (Dollars) c. $81,818.18 (Dollars) d. $225,000 (Dollars)

$57,051.28 (Dollars)

What is the taxable gain of a property that sold for $1,100,000 with an adjusted basis of $525,000...? a. $575,000 (Dollars) b. $1,100,000 (Dollars) c. $525,000 (Dollars) d. $500,000 (Dollars)

$575,000 (Dollars)

The annual net income for a property is $218,000. If the taxable income is $156,000, what is the allowable annual depreciation of the property...? a. $156,000 (Dollars) b. $218,000 (Dollars) c. $62,000 (Dollars) d. $60,200 (Dollars)

$62,000 (Dollars)

This section of the Internal Revenue Code (IRC) allows for an exclusion on capital gains tax at the sale of a primary residence...? a. 121 b. 150 c.1031 d. 161

121

When executing a 1031 Exchange, how many days does an owner have to acquire the new property...? a. 180 days b. 30 days c. 45 days d. 60 days

180 days

Mark owns a single family residence. Using the straight-line depreciation method, what is the theoretical economic life of Mark's property...? a. 39 years b. 27.5 years c. 37.5 years d. 25.5 years

27.5 years

Using the straight-line depreciation method, commercial property is depreciated over how many years...? a. 29 b. 37.5 c. 27.5 d. 39

39

When executing a 1031 Exchange, how many days does an owner have to identify a new property...? a. 45 days b. 60 days c. 30 days d. 180 day

45 days

Peter is in the process of selling his multi-family building. In order to take advantage of a 1031 exchange, Peter must purchase which of the following properties...? a. Office Building b. Multi-family Building c. Shopping Center d. Any of the answer choices provided are correct

Any of the answer choices provided are correct

In order to qualify for a 1031 exchange, a newly purchased property must be located where...? a. In the State of the original property b. In the City of the original property c. Anywhere in the United States d. In the County of the original property

Anywhere in the United States

When does depreciation NOT help the owner of a property...? a. After the 1st year of ownership b. After the 2nd year of ownership c. At the purchase of the property d. At the sale of the property

At the sale of the property

A major accounting method that recognizes revenues and expenses at the time physical cash is actually received or paid out is known as...? a.Pro-forma b. Basis c. Adjusted Basis d. Boot

Basis

Which of the following is considered a depreciable asset...? a. Personal use assets b. Furniture c. Buildings d. Land

Buildings

A profit that results from the sale of a property where the amount realized from the sale exceeds the purchase price is known as...? a. Capital Gain b. Active Income c. Boot d. Cash Flow

Capital Gain

Operations income does NOT include which of the following...? a. Portfolio income b. Capital gains c. Active income d. Passive income

Capital gains

This means of depreciation breaks down a property into various components and then determines the depreciation on each component separately...? a. Net Depreciation b. Unit-for-production Depreciation c. Straight-line Depreciation d. Component Depreciation

Component Depreciation

Under the Taxpayer Relief Act of 1997, buyers were allowed to use money from these funds toward a down payment without penalties...? a. IRA Funds b. 401K Funds c. Hedge Funds d. Insurance Funds

IRA Funds

Which of the following assets are NOT depreciable...? a. Land b. Office building c. Shopping center d. Single family residence

Land

The IRS allows homeowners to deduct this from their tax returns...? a. Mortgage interest and principal b. Mortgage payments c. Mortgage principal d. Mortgage interest

Mortgage interest

Which of the following is NOT considered operations income...? a. Portfolio income b. Passive income c. Net proceeds from sale of property d. Active Income

Net proceeds from sale of property

This type of income is realized by the owner during the year-to-year operations of the property...? a. Operation income b. Residual income c. Market income d. Capital gains

Operation income

Short-term capital gains is taxed at what tax rate...? a. Ordinary income tax rates b. State tax rates c. City tax rates d. Federal tax rates

Ordinary income tax rates

Which of the following refers to the amount of gain subject to tax when a property is sold...? a. Gross gain b. Realized gain c. Net gain d. Recognized gains

Recognized gains

The Low Income Housing Credit (LIHC) was established under this Act...? a, Tax Reform Act of 1997 b. Taxpayer Relief Act of 1997 c. Tax Reform Act of 1986 d. Fair Housing Act of 1968

Tax Reform Act of 1986

14. When depreciation is subtracted from net income to determine a property's taxable income, the depreciation is considered a...? a. Tax credit b. Tax deduction c. Tax savings d. Tax rebate

Tax deduction

This type of depreciation is relevant to real estate...? a. Material depreciation b. Tax depreciation c. Unit-of-production depreciation d. Capital depreciation

Tax depreciation

Under Section 1031 of the US Internal Revenue Code, the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due is known as...? a. Depreciation b. Boot c. Tax-Deferred Exchange d. Tax Shelter

Tax-Deferred Exchange

As a result of this Act, the top capital gains rate fell from 28% to 20%...? a. Homestead Act b. Taxpayer Relief Act of 1997 c. Taxpayer Relief Act of 1982 d. Fair Housing Act of 1988

Taxpayer Relief Act of 1997

Due to this Act, the profits from the sale of a personal residence were allowed to be exempt...? a. ADA b. Taxpayer Relief Act of 1988 c. Taxpayer Relief Act of 1997 d. Fair Housing Act of 1968

Taxpayer Relief Act of 1997