Chapter 14. Taxation of Real Estate

Compared to ordinary income tax rates, capital gains are taxed:

at a lower rate.

A single person can avoid paying capital gains taxes on up to what amount of profit from the sale of a residence?

$250,000

Each year property taxes in California (Proposition 13) are allowed to increase by what percentage?

2%

The homeowner's property tax exemption will reduce an assessed valuation of $200,000 to:

$193,000.

A married couple can exude from taxable income up to what amount of profit from the sale of a residence?

$500,000

The documentary transfer tax is charged on money borrowed or cash down payments at the rate of:

55 cents per $500.

The first installment of property taxes is due on November 1st. When is it delinquent?

December 10

For income tax purposes, you may deduct what portion of your house payment?

Interest only

When do property taxes become a lien (before the fiscal year starts)?

January 1

Municipal bonds issued to fund streets, sewers and other infrastructure needs before a subdivision is built and paid for by the purchaser are called:

Mello-Roos liens

A property owner CANNOT deduct depreciation on what type of real property?

Residential

If you sell your house, how do you determine your gain or loss?

Subtract adjusted cost basis from adjusted sale price

With regards to depreciation of real property, which of the following is TRUE according to income tax laws?

The land cannot be depreciated, but the improvements can.

Any net cash or net mortgage relief that a participant in an exchange might receive in addition to the actual property is known as:

boot.

A city tax on a real estate brokerage firm's gross receipts is called a:

business license tax.

Which of the following non-profit organization's real properties are usually exempt from property taxes?

charitable religious medical or educational

A homeowner can deduct from income taxes all the items listed below, except:

depreciation.

An owner can deduct a "loss" on the sale of residential property if that property:

has been converted into rental property.

The sale of real estate in which the payments for the property extend over more than one calendar year is called a(n):

installment sale.

If property taxes are NOT paid by June 30, the property:

is sold to the state starts a five year redemption period remains undisturbed for five years