Chapter 18 - Review Questions

What does the county property appraiser determine? (a) Tax rate (b) Market value (c) Assessed value (d) Just value

(c) Assessed value

What discount percentage is given to property owners who pay their real estate tax bill in November? (a) 1%. (b) 2%. (c) 3%. (d) 4%.

(d) 4%.

How is 10 mills expressed as a decimal?

.010

What is the decimal value of 15 mills that would be used to calculate a tax levy?

.015

The millage rates that are used to determine the tax levy for a property are: County (6 mills), City (6 Mills) and school board (5 Mills). What is the total millage rate (expressed as a decimal number) for the 3 taxing authorities?

.017

A tac certificate is sold at public auction. how long does the property owner have to pay the tax certificate plus interest to redeem the tax certificate and maintain ownership?

2 years from the month of the tax certificate sale

What discount can a property owner receive if they pay their property tax in full in december, prior to the due date?

3%

What Exemption amount can be claimed by a widower who qualifies for homestead tax exemption on a property that is assessed at $90,000?

50,500

When does an unpaid property tac bill become delinquent for taxes that were assessed in 2018?

April 1, 2019

Property Taxes are levied by which entity?

Local Government

What term applied when a property or homeowner qualifies for a reduced tax levy?

Partially Exempt

What does a homeowner's insurance policy typically provide?

Property Insurance and Personal liability coverage

What term is refers to the document an investor purchases when property taxes are deliquent?

Tax Certificate

Which statement correctly describes the bidding for a tax certificate sale? a. The bidding opens at 18% interest and sells to the lowest bidder. b. the bidding opens at the loan balance amount and sells to the highest bidder c. the bidding opens at the assessed property value and sells to the highest bidder d. the tax certificate sells to the highest bidder

a. The bidding opens at 18% interest and sells to the lowest bidder.

All of the following are tax benefits of homeownership, EXCEPT: a. Deduction of an amount of mortgage interest paid b. Deduction of mortgage principal paid c. Exclusion of an amount of the gain on the sale of a principal residence d. Deduction of property tax paid

b. Deduction of mortgage principal paid

Joe bought a single-family home in November of 2018. All of the following conditions must exist for Joe to qualify for homestead tax exemption in 2019, EXCEPT: a. The property must be Joe's primary residence b. The assessed value of the property must be at least $50,000 c. The property must be Joe's permanent residence d. Joe must have file for exemption with the county property tax appraiser between Jan 1st and March 1st of 2019

b. The assessed value of the property must be at least $50,000

All of the following are allowable steps that can be taken by the property owner to protest the tax assessment, EXCEPT: a. File an appeal with the Florida District Court of Appeals b. Request an informal conference with the county property appraiser c. File a request for a hearing before the Value adjustment board d. Refuse to pay the tax levy

d. Refuse to pay the tax levy

What additional benefit does the save our homes legislation provide to a Florida Homeowner who purchases a new residence, also in the state of florida?

the homeowner can transfer the actual cap savings to the new homestead. The maximum amount of transferrable cap savings is limited to $500,000.

What is the purpose of the Save our homes assessment limitation?

to limit the increase in the amount of tax dollars a homeowner could be assessed in any given year and to protect against inflationary increases that could force property owners to sell because of an increased tax burden

How is the total tax levy calculated for a property that has an assessed value of $100,000 and is eligible for homestead exemption?

total tax liability minus the deductions for basic and 2nd exemption.

Which statement best describes the interest that is payable on tax certificates? (a) It is based on the lowest bid received. (b) It is never lower than 18%. (c) It is negotiable between property owner and bidder. (d) It is established by law.

(a) It is based on the lowest bid received.

Which type of property is immune from paying property taxes?

Government-owned property that is used to provide government services.

The street in front of Isabel's home is being resurfaced. Cost is $60 per front foot and the city is covering 40% of the cost. Isabel's lot measures 90 feet by 100 feet. What is Isabel's share of the improvement?

$1620

What is the total tax liability before any exemptions are taken for a property with an assessed value of $100,000 where the count tax rate is 6 mills, the city tax rate is 8 mills, and the school board tax rate is 5 mills?

$1900

A property is assessed at $50,000. what homestead tax exemption can be taken from a qualified property owner?

$25,000

A property has a value of $100,000. An insurance policy has been obtained from Company A for $25,000, and a second policy is obtained from Company B for $75,000. If a loss of $20,000 is sustained, what is the amount recoverable from Company A?

$25,000 Company A + $75,000 Company B = $100,000 Total Coverage $25,000 Company A ÷ $100,000 Total Coverage = .25 (25%) Liability $20,000 Loss x .25 Company A Liability = $5,000 Amount paid by Company A

A property has a value of $150,000. A $45,000 insurance policy was obtain from Company A, and a $15,000 insurance policy was obtained from Company B. If a loss of $12,000 is sustained, what amount is recoverable from company B?

$3,000

A married couple bought a home for which the cost basis was $300,000. During the period of their ownership, the owners made certain IRS- allowable improvements totaling $100,000. How much can they sell the property for without being taxed on the gain?

$300,000 Cost basis + $100,000 IRS-allowed capital improvements = $400,000 Adjusted basis $400,000 Adjusted cost basis + $500,000 Allowable exclusion /Married = $900,000 Maximum sale price without being taxed on the gain

What is the amount of the second tier exemption for a property with an assessed value of $100,000 where the county tax rate is 6 mills, the city is 8 mills, and the school board is 5 mills?

$350

The assessed value for a residence is $70,000. The homeowner qualifies for homestead tax exemption. What is the total amount of exemption?

$45,000

The city is repairing the streets in a neighborhood. the cost is $15 per lineal foot and the city will pay 40% of the cost. The lots on each side of the street measures 100 feet x 120 feet. What is each homeowner's share of the special assessment for street repairs?

$450 each owner

What is the amount of the first tier (basic) exemption for a property with an assessed value of $100,000 where the county tax rate is 6 mills, the city is 8 mills, and the school board is 5 mills?

$475

What is the total Homestead exemption that a 20% disabled vet would receive in Florida on a property that was valued at $80,000?

$55,000

An unmarried homeowner bought a home with a cost basis of $250K. During the 5-year period of ownership as the principal residence, the owner made IRS-allowable improvements totaling $50K. How much can the owner sell the property for without being taxed on the gain?

$550,000

Jane is a widow who has lived in her home in Clearwater for the past 15 years. Although she is totally blind, she continues to live alone. The city tax rate is 5.5 mills, the county rate is 7.5 mills and the school board rate 6.5 mills. Her home is assessed for $86,000 for tax purposes. If she files for all allowable exemptions, what is the amount of her tax levy?

$845

The city is paving the street in front of Bill's home. The cost of the paving is estimated to be $18.50 per lineal foot, and the city has agreed to pay 20% of the cost. If Bill has a lot measuring 115 feet by 150 feet, what is Bill's share of the assessment?

$851

A homeowner disagrees with the assessment of his property. What is the first step in the process to attain a lower assessment? (a) Contact the county property appraiser. (b) File an appeal with the value adjustment board. (c) Contact the mayor's office. (d) File an appeal with the district court of appeals.

(a) Contact the county property appraiser.

Individuals who own their primary residence, are permitted certain income tax deductions. Which of the following is a permitted tax deduction? (a) Points paid to purchase or refinance (b) Mortgage payments (c) Maintenance expenses (d) Utility bills

(a) Points paid to purchase or refinance

Who can appraise property for purposes of taxation? (a) The county property appraiser (b) The local school board (c) The city in which the property is located (d) Special taxing districts

(a) The county property appraiser

According to Florida's Save Our Homes Act, the assessed value of homestead property cannot be increased in any one year by more than which of the following? (a) The lesser of 3% or the CPI (b) The greater of 3% or the CPI (c) 10 mills (d) An amount determined by the county property appraiser

(a) The lesser of 3% or the CPI

Which of the following statements best describes the Greenbelt Laws? (a) They limit the assessed value on agricultural land in or near urban areas. (b) They help to raise the tax base. (c) They provide for the best use of land. (d) They prevent land from being used for development.

(a) They limit the assessed value on agricultural land in or near urban areas.

Complete the statement. Special assessment liens: (a) are based upon improvements that add value to the property. (b) are an ad valorem tax. (c) must be based on the value of the assessed property. (d) are a form of a general lien, that apply to any property owned by the taxpayer.

(a) are based upon improvements that add value to the property.

Complete the statement. If a property owner fails to pay property taxes, the resulting lien is ________. (a) held by the county until the certificate is sold. (b) owned by the county property appraiser. (c) foreclosed on by the sheriff. (d) sold at public auction for the highest interest rate.

(a) held by the county until the certificate is sold.

What must an individual do to qualify for a homestead tax exemption? (a) Own the property. (b) Own and use the home as a primary residence. (c) File for a homestead tax exemption by March 31st. (d) Live in his or her principal residence for the entire year.

(b) Own and use the home as a primary residence.

Special assessments are used to pay for which of the following? (a) School bonds (b) Sidewalks, sewers, and other public improvements that benefit the property owner (c) City services in excess of operating revenues (d) New public structures such as sport facilities

(b) Sidewalks, sewers, and other public improvements that benefit the property owner

A buyer recently purchased a home from a seller who owned and lived in the home for several years. The seller had qualified for and filed for all allowable tax exemptions. Which statement is correct? (a) The buyer will likely pay less taxes than the seller if he/she files for Homestead exemption. (b) The buyer's taxes will most likely be higher than the seller's because the limitation on taxes created by the Save Our Homes Act will be eliminated. (c) The buyer will not be able to file for his homestead exemption until he has owned the home for a minimum of 12 months. (d) The seller will be subject to federal capital gains taxes on any profit derived from the sale.

(b) The buyer's taxes will most likely be higher than the seller's because the limitation on taxes created by the Save Our Homes Act will be eliminated.

Which expenses may be deducted by a homeowner, regarding his or her principal residence? (a) real property taxes, insurance, and major repairs. (b) mortgage interest and real property taxes. (c) real property taxes, homeowner association assessments, and mortgage payments (d) property insurance, real property taxes, and mortgage interest

(b) mortgage interest and real property taxes.

Which of the following statements regarding exempt and immune property is correct? (a) A church is an exempt property that would not be assessed for tax purposes. (b) Nonprofit organizations engaged in charitable activities are considered immune property that would be totally exempt from payment of property taxes. (c) A county court house is immune property that would not be assessed or subject to taxation. (d) Government-owned properties that are leased to private businesses are exempt from payment of property taxes.

(c) A county court house is immune property that would not be assessed or subject to taxation.

To which organization is real estate tax most important? (a) Federal government (b) State government (c) Local government (d) Local nonprofit organizations

(c) Local government

Homeowners who file itemized tax returns are allowed deductions for which of the following items? (a) Real estate taxes and repairs (b) Hazard insurance and depreciation (c) Real estate taxes and mortgage interest (d) Mortgage interest and utilities

(c) Real estate taxes and mortgage interest

Complete the statement. In Florida, the owner of a homestead property located outside the city limits would be required to pay property taxes levied ________. (a) on the total assessed value of the property. (b) by the nearest city. (c) by the county and school board. (d) by the state of Florida.

(c) by the county and school board.

Which statement is correct with respect to homeowner insurance coverage? (a) All losses are covered. (b) Flood losses are limited to $25,000. (c) Personal property is not covered. (d) Homeowners with multiple policies will not receive the full amount of their loss from each insurer.

(d) Homeowners with multiple policies will not receive the full amount of their loss from each insurer.

Regan and Shawn recently purchased a new home and wish to file for the homestead tax exemption. All of the following statements are correct, EXCEPT: (a) The filing period for the exemption is January 1st through March 1st . (b) In order to qualify for the exemption, the property must be occupied as the principal residence. (c) If the homeowner is totally and permanently disabled, then he/she may be entitled to a total exemption. (d) The property will now be immune from taxation.

(d) The property will now be immune from taxation.

Which statement would be correct regarding a single homeowner who sold a principal residence and itemized deductions on his or her federal income tax return? (a) Any capital gain realized from the sale is taxable at a reduced rate. (b) All capital gain would be subject to tax at the taxpayer's marginal rate. (c) A loss of up to $3,000 on the sale may be deducted from adjusted income. (d) Up to $250,000 may be excluded from taxation if the taxpayer had occupied the residence for at least 2 of the past 5 years.

(d) Up to $250,000 may be excluded from taxation if the taxpayer had occupied the residence for at least 2 of the past 5 years.

Real Estate property taxes are "ad valorem" taxes. What does this tell you about property taxes?

Property taxes are based on the assessed value of the property.

The city plans to repave a road. The lot next to the road measures 110' x 130'. The cost of the improvement is estimated to cost $10 per lineal foot. The city decides to assume 30% of the expense. What is the special assessment to the property owner?

Step 1 110 Front-feet x $10 Estimated cost per foot = $1,100 Total cost $1,100 Total cost x .30 City share (30%) = $ 330 City contribution Step 2: $1,100 Total cost - 330 City contribution = $ 770 Property owners' contribution $770 x .50 Two property owners (50% each) = $385 Each property owner's cost Note in the example that each owner is only charged for one-half of the cost of the improvement. This is due to the fact that someone owns the other side of the street; each party pays only to the middle of the street, regardless of who owns the property or what physical feature exists on the opposite side of the street (i.e. lake or park).

A widow lives in Tampa, Florida. Her home is assessed at $80,000. She has been a resident of the state for 15 years and qualifies for the homestead tax exemption. The county tax rate is 6 mills, the city tax rate is 5 mills, and the school board tax rate is 5 mills. What is the widow's tax levy?

Step 1 Calculate what the taxes would be without any exemptions. $80,000 Assessed value x .016 (16 mills) Total tax rate (county, city, and school) = $1,280 Total tax liability Step 2 Calculate first tier exemption ($25,000 basic) for all three taxing authorities. $25,000 Basic exemption amount + $500 "Widow" exemption = $25,500 Total exemption amount $25,500 x .016 (16 mills) = $408 Total tax rate Deduction for basic exemption Step 3 Calculate second tier exemption for city and county taxes only. $25,000 Second exemption amount x .011 (11 mills - County + City) = $275 Deduction for second exemption Step 4 Subtract each deduction amount from the total tax liability to determine the total tax levy. $1,280 Total tax liability - $408 Basic exemption = $872 - $275 Second exemption = $597 Total tax levy