Federal Income Taxes

Over the life of the property

Depreciation allows an owner of a business for investment property to deduct the cost of acquiring the property _____ Over the life of the property In the year it is paid

Improvements to the land only

Depreciation is based on______ Land only All real and personal property Land and any improvements to land Improvements to land only

Adjusted basis

For tax purposes, the purchase price of real property plus the cost of acquisition plus the cost of improvements is called the ______ Original value Amount realized Adjusted basis Original price

Homeowners and investors

Mortgage interest, property taxes, and uninsured casualty losses are deductible by_____ Businesses and investors Homeowners only Homeowners and investors Neither homeowners or investors

Purchase price

The adjusted basis for real property is the cost of acquisition and the cost of capital improvements added to the______ Purchase price Amount realized Selling price Capital gain

Cost of acquisition plus capital improvements

The adjusted basis for real property is the purchase price plus the ________ Cost of acquisition only Cost of sale Capital gain Cost of acquisition plus capital improvements

Cost of sale

The amount realized for determining capital gains tax on real property is the selling price minus the_____ Cost of acquisition Purchase price Adjusted basis Cost of sale

Married taxpayers filing a joint return

The maximum expiration of gain from the sale of a friend had residence is $500,000 for ______ Married taxpayers filing a joint return Any married couple Married taxpayers filing separate returns Any two taxpayers

Adjusted basis

The only difference between calculating the amount of capital gain subject to tax for residential and for business/investment property relates to________ Amount realized Adjusted basis

2 of the previous 5 years

To qualify for the $250,000 exclusion of gain benefit, a home owner must have owned and lived in the house for __________ . The previous 5 years 3 of the previous 5 years 2 of the previous 5 years The previous 2 years

Ownership and use

To qualify for the $250,000 exclusion of gain benefit, a homeowner must meet the _______ tests. Use and time Ownership and use Ownership and distance Distance and time

Adjusted basis

When real property is sold, the capital gain which is subject to taxation is the difference between the amount realized and the ______ of the property. Value Original value Cost Adjusted basis

Subtracted from the basis

When the adjusted basis is calculated for a business or investment property, the accumulated depreciation is _______ Not included in the calculation Subtracted from the basis Added to the basis

All of the answers shown

Which of he following are deductible by an investor in calculating income tax? Operational losses Depreciation All of the answers shown Expenses of operation

Expenses of operation

Which of the following are deductible by an investor in calculating income tax? Depreciation on land and improvements Vacancy losses Expenses of operation All of the answers shown

All of the answers shown

Which of the following is considered an expense of operation that can be deducted on a business or investment property? All of the answers shown Repairs Insurance Management fees

Utilities

Which of the following is considered an expense of operation that can be deducted on a business or investment property? Depreciation on land and improvements All of the answers shown Utilities Vacancy losses

Real estate commissions and attorney fees

Which of the following items are deductible in the year they are paid? Real estate commissions and attorney fees. Attorney fees only. Neither attorney fees nor real estate commissions. Real estate commissions only.

Local property taxes

Which of the following may be deducted by the owner of a personal residence when calculating income tax? Local property taxes Depreciation Expenses of operations All of the answers shown

Depreciation

Which of the following our deductible by an investor but not the owner of a personal residence when calculating income tax? Mortgage interest Local property taxes Depreciation Uninsured casualty losses

Improvements and can be deprecated

With regard to depreciation, fruit trees are_________ Improvements but can't be depreciated. Improvements and can be depreciated. Not improvements and can't be depreciated. Not improvements that can be depreciated.

Decreases each year

With the accelerated method of calculating depreciation, the amount of the depreciation deduction _______ Increases each year. Decreases each year. Is the same each year. Is always greater than for other methods.

Is the same each year

With the straight line method of calculating depreciation, the amount of the depreciation deduction _________ Increases each year. Decreases each year. Is the same each year. Is always greater than for other methods.

Expenses of operations

which of the following are deductible by an investor but not the owner of a personal residence when calculating income tax? Mortgage interest All of the answers shown Local property taxes Expenses of operations

Mortgage interest

which of the following may be deducted by the owner of a personal residence when calculating income tax? Depreciation Operational Losses Mortgage Interest All of the answers shown

If it is not covered by insurance

A casualty loss may be deducted by a property owner _______

First and second homes only

An owner residential property for personal use may deduct the interest on______

Interest only

And other residential property for personal use may deduct which of the following mortgage items? Principal only Interest only Interest and principal Neither interest or principal

In the year they are paid

And owner at a residence for person I deduct the cost of mortgage interest, property taxes, and Uninsured casualty losses ____ In the year they are paid. Over the life of the property