Real Estate U Ch. 17 Q&A
51. 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...?
10,000
39. Using the straight-line depreciation method, income producing, non-residential properties depreciate over how many years...?
39
53. Using the straight-line depreciation method, commercial property is depreciated over how many years...?
39
Cash received in a tax-deferred exchange is known as...?
boot
23. Which of the following is considered a appreciable asset...?
business machinery
a profit that results form the sale of a property where the amount realized form the sale exceeds the purchase price, is known as
capital gain
2. 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
37. Operations income does NOT include which of the following...?
o ACapital gains
59. Which of the following types of depreciation is relevant to real estate...?
o Economic depreciation
Which of the following is NOT considered a appreciable asset...?
personal use assets
3. When real property is sold at a gain and accelerated depreciation has been claimed, the owner may be required to pay a tax at ordinary rates to the extent of the excess accelerate depreciation. This is known as___
recaptured depreciation
41. 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...?
straight-line depreciation
37. The depreciable basis of a commercial property is $525,000. Using the straight-line method, what is the allowable annual depreciation for the property...?
13461.54 need help resolving this one
45. 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
19. Mark owns a single family residence. Using the straight-line depreciation method, what is the theoretical economic life of Mark's property...?
27.5 years
21. 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
49. Under the Taxpayer Relief Act of 1997, joint filers can qualify up to how much in tax exemptions...?
500,000
3. Jason purchased a property for $500,000. Over the 12 years he lived in the property, he accrued $218,000 is deducted depreciation. If Jason were to sell the property today, what would his adjusted basis be...?
500,000 - 218,000 = 282000
57. 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...?
8,181.82
cash received in a tax-deferred exchange is known as
Boot
7. Real estate investors will most likely benefit most from this type of depreciation...?
Component Depreciation
11. A 1031 exchanges applies to what types of property...?
Investment Properties
13. What type of properties benefit from a 1031 exchange...?
Investment properties
15. According to the IRS, mortgage interest is considered a permitted deductible on this property type...?
Secondary residence
income for which services have been performed is known as
active income
The original cost of a property minus depreciation and sales, plus allowable additions, such as capital improvements and certain carrying costs and assessments, is known as___
adjustable basis
9. In order to qualify for a 1031 exchange, a newly purchased property must be located where...?
anywhere in the united STates
5. A monetary gain resulting from the increase in the market value of an investment, excluding additions of capital is known as___
appreciation
25. 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
5. This means of depreciation breaks down a property into various components and then determines the depreciation on each component separately...?
component Depreciation
55. This type of depreciation is described by the physical deterioration of a property...?
economic depreciation
27. Which of the following is considered a appreciable asset...?
equipment
1. 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...?
i dont know how to resolve it but the answer is 57051.28
17. A 1031 exchanges applies to what types of property...?
investment properties
17. Property taxes on these types of properties can only be deducted if one's taxes are itemized...?
non-investment properties
35. 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
3. An income deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property___
tax depreciation
35. An annual allowance for the wear and tear, deterioration, or obsolescence of a property is known as...?
tax depreciation
An income deduction that allows a taxpayer to recover the cost or other basis of certain property is known as...?
tax depreciation
4. 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
43. As a result of this Act, the top capital gains rate fell from 28% to 20%...?
taxpayer Relief Act of 1997
47. Due to this Act, the profits from the sale of a personal residence were allowed to be exempt...?
taxpayer Relief Act of 1997
