chapter 17 real estate quiz

Under the Taxpayer Relief Act of 1997, a buyer can use up to how much of their IRA fund towards a down payment, without being subject to an early withdrawal penalty...? -$10,000 -$20,000 -$250,000 -$500,000

$10,000

If the depreciable basis for a single family residence is $2,750,000, what is the annual allowable depreciation assuming a 2.75 economic lifespan? -$100,000 -$2,750,000 -$275,000 -$10,000

$100,000

If the depreciable basis for a single family residence is $550,000, what is the allowable annual depreciation using the straight-line depreciation method? -$20,000 -$200,000 -$550,000 -$55,000

$20,000

What is the adjusted basis on a property using the following the criteria; Original Purchase Price: $500,000 Capital improvements: $89,000 Depreciation: $184,000 -$405,000 -$277,000 -$316,000 -$684,000

$405,000

A commercial property has a depreciable basis of $2,225,000. Using the straight-line method, what is the allowable annual depreciation of the property? -$57,051.28 -$81,818.18 -$162,646.45 -$225,000

$57,051.28

How much of the purchase price of a condominium is eligible for depreciation? -100% -80% -50% -The purchase price minus the land value

100%

The original of a property minus depreciation and sales of portions thereof, plus allowable additions such as capital improvements and certain carrying costs and assessments, is referred to as? -Adjusted Basis -Capital Gain -Boot -Cash flow

Adjusted Basis

The depreciable basis of a commercial property is $525,000. Using the straight-line method, what is the allowable annual depreciation of the property? -$13,461.54 -$19,090.90 -$15,365.13 -$19,646.55

$13,461.54

The depreciable basis for a single family residence is $225,000. Using the straight-line deprecation method, what is the allowable annual depreciation for the property? -$8,181.82 -$5,769.23 -$16,324.54 -$11,353.65

$8,181.82

If the net income on a property is $97,500 and the allowable annual depreciation is $8,725, what is the taxable income for the property...? -$88,775 -$97,500 -$8,725 -$8,775

$88,775

If the sale price of a property is $1,500,000, what is the taxable gain, assuming an adjusted basis of $600,000...? -$900,000 -$600,000 -$1,500,000 -$500,000

$900,000

Using the straight-line depreciation method, commercial property is depreciated over how many years? -39 -37.5 -29 -27.5

39

When executing a 1031 Exchange, how many days does an owner have to identify a new property? -45 days -180 days -30 days -60 days

45 days

Cash received in a tax-deferred exchange is known as...? -Boot -Basis -Capital Gain -Cash Flow

Boot

Which of the following is considered a depreciable asset? -Buildings -Land -Personal use assets -Furniture

Buildings

This type of income is associated with the sale of a property...? -Capital gains -Operations income -Active income -Passive income

Capital gains

The periodic expensing of an asset over the property theoretical economic life is referred to as what? -Depreciation -Appreciation -Functional obsolescence -Economic obsolescence

Depreciation

According to the IRS, which of the following property types is NOT considered a permitted deduction on ones tax return...? -Income producing properties -Primary residence -Time share -Vacant land

Income producing properties

What type of properties benefit form a 1031 exchange? -Investment properties -Primary residence -Secondary residence -Cooperative apartment

Investment properties

This program provided a dollar-for-dollar reduction in federal taxes for developers who built rental housing that serves low income households? -LIHC -HUD -Fair Housing program -Urban Redevelopment program

LIHC

This program was established to promote private sector involvement in the retention and production of rental houses for low income households...? -LIHC -HUD -Fair Housing program -Urban Redevelopment program

LIHC

The IRS allows homeowners to deduct this from their tax returns? -Mortgage interest -Mortgage payments -Mortgage principal -Mortgage interest and principal

Mortgage interest

The formula for determining realized gains is equal to? -Net sales price - Adjusted Basis -Adjusted Basis - Net Sales Price -Income - Adjusted Basis -Adjusted Basis - Income

Net Sales Price - Adjusted Basis

The taxable income of a property is calculated by subtracting the depreciation from this? -Net income -Gross income -Effective gross income -Total income

Net income

According to the IRS, which of the following property types are considered a permitted deduction...? -Personal residences -Investment properties -Income producing properties -Commercial properties

Personal residences

Which of the following is NOT considered a depreciable asset? -Personal use assets -Single family residence -Multi family building -Shopping center

Personal use assets

David owns a commercial property. In determining the amount of taxes owed, David's accountant subtracts depreciation from the net income to arrive at the taxable income of the property. The tax rate is then multiplied to this number to determine the amount of taxes owed. This is referred to as what...? -Tax deduction -Tax credit -Tax savings -Tax rebate

Tax deduction

When depreciation is subtracted from net income to determine a property taxable income, the depreciation is consider a? -Tax deduction -Tax credit -Tax rebate -Tax savings

Tax deduction

Under section 1031 of the US Internal Revenue Code, the exchange of certain types of property may defer the recognition of capital gains or losses due upon sale, and hence defer any capital gains taxes otherwise due is known as? -Tax Deferred exchange -Tax shelter -Depreciation -Boot

Tax deferred exchange

When calculating the amount of taxes to be paid on a property, the tax rate is multiplied by this number -Taxable income -Net income -Gross income -Effective gross income

Taxable income