REU Ch. 17 Quiz

If the depreciable basis for a single family residence is $550,000, what is the allowable annual depreciation using the straight-line depreciation method...? $550,000 (Dollars) $200,000 (Dollars) $55,000 (Dollars) $20,000 (Dollars)

$20,000 (Dollars)

Under the Taxpayer Relief Act of 1997, a single filer can qualify up to how much in tax exemptions...? $250,000 (Dollars) $200,000 (Dollars) $300,000 (Dollars) $500,000 (Dollars)

$250,000 (Dollars)

Under the Taxpayer Relief Act of 1997, a married filer can qualify up to how much in tax exemptions...?

$500,000 (Dollars)

Long-term capital gains applies to properties owned longer than...? 4 years 1 year 2 years 3 years

1 year

How much of the purchase price of a condominium is eligible for depreciation...? 80 (Percent %) The purchase price minus the land value 100 (Percent %) 50 (Percent %)

100 (Percent %)

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

121

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

180 days

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

180 days

The Taxpayer Relief Act of 1997 allowed homeowners to realize a $250,000 - $500,000 tax exemption at the sale of their property. However, the homeowner must have lived in the residence for how many years, within the past 5 years...? 1 3 5 2

2

Using the straight-line depreciation method, income producing residential properties depreciate over how many years...? 37 25.5 27.5 39

27.5

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

39

Using the straight-line depreciation method, income producing, non-residential properties depreciate over how many years...? 39 35.7 29 37.5

39

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...? Shopping Center Any of the answer choices provided are correct Office Building Multi-family Building

Any of the answer choices provided are correct

A monetary gain resulting from the increase in the market value of an investment, excluding additions of capital, is known as...? Appreciation Cash Flow Capital Gain Boot

Appreciation

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

Basis

Cash received in a tax-deferred exchange is known as...? Basis Boot Cash Flow Capital Gain

Boot

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

Capital gains

The depreciable basis of a commercial property is $525,000. Using the straight-line method, what is the allowable annual depreciation for the property...? $19,646.55 (Dollars) $15,365.13 (Dollars) $13,461.54 (Dollars) $19,090.90 (Dollars)

Divide by 39 $13,461.54 (Dollars)

The depreciable basis of an income producing, non-residential property is $840,500. Using the straight-line depreciation method, what is the allowable annual depreciation of the property...? $21,551.28 (Dollars) $22,646.77 (Dollars) $30,563.64 (Dollars) $840,000 (Dollars)

Divide by 39 = $21,551.28 (Dollars)

This type of depreciation is described by the physical deterioration of a property...? Unit-of-production depreciation Economic depreciation Capital depreciation Taxable depreciation

Economic depreciation

Which of the following types of depreciation is relevant to real estate...? Unit-of-production depreciation Capital depreciation Material depreciation Economic depreciation

Economic depreciation

Which of the following is considered a depreciable asset...? Furniture Equipment Land Personal use assets

Equipment

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

IRA Funds

According to the IRS, which of the following property types is NOT considered a permitted deduction on one's tax return...? Income producing properties Primary residence Vacant land Time share

Income producing properties

A 1031 exchanges applies to what types of property...? Secondary residences Personal residences Investment properties Cooperative apartments

Investment properties

What type of properties benefit from a 1031 exchange...? Primary residence Cooperative apartment Investment properties Secondary residence

Investment properties

25. The depreciable basis for a single family residence is $225,000. Using the straight-line depreciation method, what is the allowable annual depreciation for the property...?

It's residential so divide by 27.5

What is the Adjusted Basis on a property using the following criteria: Original Purchase Price: $500,000 Capital Improvements: $89,000 Depreciation: $184,000 $684,000 (Dollars) $316,000 (Dollars) $227,000 (Dollars) $405,000 (Dollars)

Just add capital improvements and subtract depreciation: $405,000 (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...? $81,818.18 (Dollars) $225,000 (Dollars) $57,051.28 (Dollars) $162,646.45 (Dollars)

Just divide by 39 = $57,051.28 (Dollars)

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...? $275,000 (Dollars) $10,000 (Dollars) $100,000 (Dollars) $2,750,000 (Dollars)

Just divide: $100,000 (Dollars)

What is the taxable gain of a property that sold for $1,100,000 with an adjusted basis of $525,000...?

Just subtract Net Sales Price - Adjusted Basis: $575,000

The net income of a property is $125,000. If the allowable annual depreciation is $22,500, what is the taxable income for the property...? $125,000 (Dollars) $102,500 (Dollars) $10,250 (Dollars) $100,000 (Dollars)

Just subtract: $102,500 (Dollars)

This program was established to promote private sector involvement in the retention and production of rental houses for low income households...? HUD Fair Housing program LIHC Urban Redevelopment program

LIHC (Low Income Housing Credit)

Short-term capital gains applies to assets owned for this time period...? Less than 5 years Less than 4 years Less than 2 years Less than 1 year

Less than 1 year

The formula for determining realized gains is equal to...? Adjusted Basis - Net Sales Price Adjusted Basis - Income Net Sales Price - Adjusted Basis Income - Adjusted Basis

Net Sales Price - Adjusted Basis

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

Operation income

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

Ordinary income tax rates

Which of the following is the correct formula for determining the Adjusted Basis on a property...? Original Purchase Price + Depreciation Original Purchase Price - Depreciation Original Purchase Price - Capital Improvements - Depreciation Original Purchase Price + Capital Improvements - Depreciation

Original Purchase Price + Capital Improvements - Depreciation

According to the IRS, which of the following property types are considered a permitted deduction...? Income producing properties Investment properties Commercial properties Personal residences

Personal residences

A method of calculating the depreciation of an asset which assumes the asset will lose an equal amount of value each year, is known as...? Recaptured Depreciation Straight-line Depreciation Tax-Deferred Exchange Capital Loss

Straight-line Depreciation

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

Taxpayer Relief Act of 1997

The depreciable basis for a single family residence is calculated using the following formula...? Value of house - land value = Depreciable basis Asking price - land value = Depreciable basis Income - land value = Depreciable basis Land value - value of house = Depreciable basis

Value of house - land value = Depreciable basis