6. Quiz

the profit realized from the sale of real estate or other investments is known as?

capital gains

investing in real property includes which of the following?

cash flow appreciation tax savings

the amount of decrease in value of an asset that is allowed in computing the value of the property for tax purposes is known as?

depreciation

by using a high amount of leverage to purchase a property, the investor will experience a _________ degree of risk?

higher

the use of a mortgage when buying an investment property is an example of?

leverage

the use of debt financing of an investment to maximize the return per dollar of equity invested is known as?

leverage

this is a section of the U.S. internal revenue service code that allows investors to defer capital gains taxes on any exchange of like-kind properties for business or investment purposes?

section 1031 exchange

a method of depreciation under which improvements are depreciated at a constant rate throughout the estimated useful life of the improvement is known as?

straight lien depreciation

using the straight line depreciation method, residential property can be depreciated over how many years?

27.5

an increase in value is known as?

appreciation