RE Chapter 14: RE Taxes

In terms of property taxation, the appraised value in a district is: A. The estimated fair market value of the property B. Never determined C. Not a factor D. Equal to the amount of taxes collected

A. The estimated fair market value of the property

Which is the superior lien in the event of a foreclosure? A. tax lien B. first mortgage C. junior mortgage D. home equity loan

A. tax lien

The purpose of imputed interest is: A. to prevent the seller from increasing the purchase price and assigning a very low rate to keep from paying taxes on earned interest B. to calculate equalization rates C. to ensure youth programs are financed D. to allow lenders to receive a fair share

A. to prevent the seller from increasing the purchase price and assigning a very low rate to keep from paying taxes on earned interest

The underlying theory of ad valorem taxation is: A. Everyone should pay an equal share B. Income taxes should remain low C. Those owning the most valuable property are able to pay more property taxes D. The federal government should mandate property tax limits

C. Those owning the most valuable property are able to pay more property taxes

A property tax rate is calculated by dividing the annual tax by the assessed values of all property subject to paying taxes: True False

True

Public improvements are financed through ad valorem taxes. True False

True

A property is appraised for $85,000 and has an assessed ratio of 65 percent of assessed value. If the tax rate is 20 mills, what would be the tax? A. $110.50 per month B. $1,105 per year C. $276.25 per month D. None of the above

B. $1,105 per year

A property pays quarterly taxes of $3,500 on an assessed value of $400,000. What tax rate would have been used to? A. 3.5 mills B. 35 mills C. 350 mills D. None of the above

B. 35 mills

What IRS Form is used by a lending institution to report interest paid on a mortgage loan? A. IRS Form 1031 B. IRS Form 1098 C. IRS Form 1099 D. None of the above

B. IRS Form 1098

The largest single source of income for local government programs and services comes from: A. Sales taxes B. Property taxes C. Income taxes D. Tourism

B. Property taxes

A special assessment is: A. revaluation of a property's value. B. a tax based upon benefit received. C. a tax levied equally against each property owner in the city or county D. a tax levied only if ad valorem tax is insufficient to fund the proposed budget

B. a tax based upon benefit received.

Real estate taxes are based upon: A. fair value B. assessed value C. full value D. current value

B. assessed value

Which of the following is used to determine annual real estate taxes? A. sales price multiplies by tax rate B. assessed value multiplied by tax rate C. assessed value minus the tax rate D. appraised value times the tax rate

B. assessed value multiplied by tax rate

Ad valorem taxes are: A. levied equally against all property owners B. based on the value of the property C. determined by the benefit of services received D. paid only upon property transfer

B. based on the value of the property

Special assessment liens: A. are voluntary liens B. take priority over all other liens C. are general liens D. are filed by the IRS

B. take priority over all other liens

What IRS Form is used by the closing agent to report to the IRS the gross proceeds or sales price of an individual's real property? A. IRS Form 1031 B. Form 1044 C. IRS Form 1099S D. IRS Form 1098B

C. IRS Form 1099S

Which of the following may be subject to property taxes: A. Military bases B. Public schools C. Private transportation D. Parks

C. Private transportation

A property is appraised for $150,000 and has an assessment ratio of 80% of appraised value. If the tax rate is 40 mills, the tax would be: A. $4,800 yearly B. $400.00 monthly C. $1,200.00 quarterly D. All of the above

D. All of the above

Tax rates may be expressed as mills. What is the value of a mill? A. 1/10 of a cent B. $1 per $1,000 of assessment C. 0.10 percent D. any of the above

D. any of the above

Tax levied upon property owners to pay for improvements benefitting a few are known as: A. charges B. general property taxes C. special excise taxes D. special assessments

D. special assessments