TN Real Estate Course- Chapter 13 Study Set

Straight-Line Depreciation

A method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement.

Capital Gains

At resale of a capital item, the amount by which the net sale proceeds exceed the adjusted cost basis (book value).

Appreciation

Monetary gain resulting from the increase in the market value of an investment, excluding additions of capital.

Property Insurance

Provides protection against most risks to property, such as fire, theft and some weather damage.

Tax Deffered Exchange (1031 Exchange)

The trade or exchange of one real property for another without the need to pay income taxes on the gain at the time of trade.

does land depreciate over time?

no, land does not depreciate over time

Origination Points

non-tax deductible hidden fees that the lenders may tack on to cover costs associated with purchasing the home (i.e. inspection cost)