CHAPTER 17

Long-term capital gains applies to properties owned longer than...?

1 year

How much of the purchase price of a condominium is eligible for depreciation...?

100 (Percent %)

Under the Taxpayer Relief Act of 1997, a buyer can use up to how much of their IRA fund towards a down payment, without being subject to an early withdrawal penalty...?

10000

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

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...?

2

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

20000

Abby owns a 2 family investment property. Using the straight-line depreciation method, over how many years will Abby's property depreciate...?

27.5 years

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

39

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

39

When executing a 1031 Exchange, how many days does an owner have to identify a new property...?

45 days

Under the Taxpayer Relief Act of 1997, joint filers can qualify up to how much in tax exemptions...?

500000

A monetary gain resulting from the increase in the market value of an investment, excluding additions of capital, is known as...?

Appreciation

When does depreciation NOT help the owner of a 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...?

Basis

The difference between a lower selling price and a higher purchase price, resulting in a financial loss to the seller is known as...?

Capital Loss

This type of income is associated with the sale of a property...?

Capital gains

The net result when income from an investment property is subtracted from the expenses is known as...?

Cash Flow

Which of the following types of depreciation is relevant to real estate...?

Economic depreciation

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

IRA Funds

A 1031 exchanges applies to what types of property...?

Investment properties

This program was established to promote private sector involvement in the retention and production of rental houses for low income households...?

LIHC

Which of the following is NOT considered operations income...?

Net proceeds from sale of property

According to the IRS, which of the following property types are considered a permitted deduction...?

Personal residences

The IRS considers mortgage interest a permitted deductible on this property type...?

Primary residence

Which of the following refers to the amount of gain subject to tax when a property is sold...?

Recognized gains

An annual allowance for the wear and tear, deterioration, or obsolescence of a property is known as...?

Tax Depreciation

Any method of reducing taxable income resulting in a reduction of the payments to tax collecting entities, including state and federal governments is known as...?

Tax Shelter

David owns a commercial property. In determining the amount of taxes owed, David's accountant subtracts depreciation from the net income to arrive at the taxable income of the property. The tax rate is then multiplied to this number to determine the amount of taxes owed. This is referred to as what...?

Tax deduction

When depreciation is subtracted from net income to determine a property's taxable income, the depreciation is considered a...?

Tax deduction

When calculating the amount of taxes to be paid on a property, the tax rate is multiplied by this number...?

Taxable Income