UNIT 11 - REAL ESTATE TAXATION

Which of the following is a tax consideration for the homeowner?

- mortgage interest deductions - tax credits - capital gains exclusion

A way to spread the cost of acquiring property used in a trade or business over its useful life that is a deduction from adjusted gross income describes

depreciation

Which of the following is considered an ad valorem tax?

real property tax

A buyer does not have to withhold a portion of the sales price from a seller when

the sales price does not exceed $100,000.

The maximum nontaxable amount that can be given as a gift to one donee, in one year, is currently

$14,000

An owner occupied residence qualifies for a homeowner's exemption of

$7,000

What is true regarding current federal estate tax law?

- The American Taxpayer Relief Act of 2012 established a federal estate tax exemption of $5 million per person, indexed for inflation. - The exemption was $5.25 million for 2013 and is $5.34 million for 2014. - The exemption is reduced by any large gifts (those subject to gift tax) made during the decedent's lifetime.

Recognizing that many older people on fixed incomes have trouble paying property taxes, the Property Tax Postponement Law was passed to allow

- senior citizens to postpone payment of property taxes. - blind or disabled people to postpone payment of property taxes.

The second proeprty tax installment is delinquent after

April 10

Unless an extension is given, a federal income tax return must be filed for the preceding tax year by

April 15

If a property owner believes that the assessed value on his or her property has been set too high, the owner could file a request to seek a reduction from the

Assessment Appeals Board

The second property tax installment is due and delinquent on

February 1st; April 10th

Real property taxes become a lien on

January 1

The first property tax installment of the tax year is due on

November 1

Propeety tax dates

You must know the fiscal tax year for the state exam. Memorization Aid: No, Darn, Foolin, Around November 1: First installment due December 10, 5 PM: Delinquent date for 1st installment February 1: Second installment due April 10, 5 PM: Delinquent date for 2nd installment

In California, the inheritance and gift taxes have been

abolished

Taxes charged in direct relation to property value are

ad valorem taxes

If Johnson's intent is to accomplish a "tax free" exchange of his apartment building, he should exchange for

another apartment building.

In computing transfer tax, the consideration paid for the property excludes

any preexisting liens or encumbrances

A personal residence and business equipment are considered

capital assets

The person responsible for determining assessed values is the

county assessor

The purpose of the property tax assessed value is to

establish the base value

An investor can take advantage of all of the following EXCEPT

homeowner's exemption from federal income tax

An installment sale represents a tax advantage because

it defers payment of capital gains.

Tax consequences with respect to real estate should be known

prior to acquisition

What can a property owner expect after sewer lines are installed in front of his/her property?

special assessment

Tax delinquent residential real property not redeemed by the owner during the five year statutory redemption period is deeded to the

state

The California sales tax is a(n)

tax paid on tangible personal property.

A principal residence must be occupied for how long to take advantage of the maximum exclusion of profit from taxable income?

two years

manufactured (mobile) home can be either personal property or real property. As personal property, a manufactured home is subject to

vehicle license fee status