Exam 1: Unit 14 - The Real Estate Business

What is the capital gains tax exclusion available to homeowners who file their income tax as single filers...?

$250,000

A building lot was sold for $88,000. If the seller made a profit of 10 percent, what was the original cost of the property...?

$80,000

A property was listed for sale at $100,000. If the original cost was 80% of the list price, what will the profit be if it sells for $100,000...?

25%

The buyers paid cash for their new home. At the same time, they purchased flood insurance. At what time will the flood insurance be effective...?

After 30 days

Most homeowners' insurance policies contain which of the following clauses...?

Coinsurance claim

All of the following affect how quickly the forces of supply and demand work except...?

Degree of standardization of the product's price

All of the following are categories of the uses of real property except...?

Developmental

The point at which supply and demand are equal is known as...?

Equilibrium

A basic homeowners' insurance policy would protect against all of the following except...?

Flooding

A world-renowned company plans to open a new large manufacturing plant. In this area, housing prices are likely to...?

Increase due to increased demand

In addition to the affordability of a home, what is a primary consideration in the selection of a property...?

Location of the property

In order to offset expenses, a high-rise condominium community rents out the ground floor to a convenience store. The building is an example of...?

Mixed use

When preparing his annual income tax return, the homeowner may be able to deduct all of the following except...?

Mortgage interest on a third home

What is the largest trade association that serves real estate licensees...?

National Association of REALTORS(R) (NAR)

Which of the following affects demand...?

Population

When the supply of a commodity decreases...?

Prices tend to rise

The basic responsibility of a property manager is to...?

Protect the owner's investment

Federal income tax regulations allow homeowners to reduce their taxable income by amounts paid for...?

Real estate taxes

The desirability of the location of a residence is influenced by all of the following except...?

Retirement prospects

Under the current tax law, most homeowners...?

Will never pay capital gains tax on the sale of their homes