45-HR. CA REAL ESTATE PRACTICE COURSE » Summer 2021 » Section 6 Unit 3 Exam

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Question #1
To depreciate real property, the business owner must own the property and use it for ______ or income-producing activity.
A.   Business
B.   A residence
C.   A rental
D.   Charitable works
Question #2
When you’re representing a client in a real estate transaction, what’s your responsibility regarding tax advice?
A.   You should tell clients the typical ways that taxes will apply and encourage them to seek advice from a tax professional.
B.   You must not address tax aspects of a transaction in any way, since this would be working outside your area of expertise.
C.   You're obligated to answer all questions the clients have regarding property taxes and general tax advice.
D.   You must be able to advise your clients on the best way to minimize their tax liability related to a purchase or sale.
Question #3
Property is no longer ______ after the taxpayer has retired the property from service.
A.   Appreciable
B.   Useful
C.   Taxable
D.   Depreciable
Question #4
You’re working with a couple who are in the market for their first home. They’re full of questions, and today they’re asking about how homeownership will affect their tax burden. Of course, you answer by providing information that’s within the scope of your license. Which of these taxes would you mention to your clients as relevant to homeownership?
A.   Capital gains credit for purchase of a property priced below market value
B.   Deduction of most closing costs on income tax for the year of purchase
C.   Possible income tax deductions for prepaid interest on a loan
D.   First-time homebuyer income tax credit based on purchase price of property

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