Glendale Community College » Real Estate » Real Estate 101 - Real Estate Principles » Fall 2021

Real Estate 101 - Real Estate Principles » Fall 2021 » Chapter14 Quiz

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Question #1

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

A. boot.

B. none of the answers are correct.

C. tax free.

D. booty.

Question #2

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

A. Installment Bonds.

B. Bond Act Issuance.

C. Mello-Roos Liens.

D. Vrooman Act Bonds.

Question #3

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

A. Interest only

B. Principal only

C. Principal and interest

D. none of the answers are correct.

Question #4

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

B. January 1

C. November 1

D. February 1

E. July 1

Question #5

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

A. March 1

B. December 10

C. November 10

D. July 1

Question #6

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

A. 10%

B. 5%

C. 2%

D. 1%

Question #7

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

A. Charitable

B. Religious, Charitable and Medical or educational

C. Religious

D. Medical or educational

Question #8

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

A. The land and improvements can be depreciated.

B. The land can be depreciated, but not the improvements.

C. Investment property cannot be depreciated.

D. The land cannot be depreciated, but the improvements can.

Question #9

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

A. $1 per $1,000.

B. none of the answers are correct.

C. 55 cents per $500.

D. 50 cents per $500.

Question #10

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

A. $500,000

B. $125,000

C. $100,000

D. $250,000

Question #11

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

A. at a lower rate.

B. at a more regressive rate.

C. at the same rate.

D. at a higher rate.

Question #12

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

A. tax deferred exchange.

B. sale-leaseback.

C. installment sale.

D. none of the answers are correct.

Question #13

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

A. $190,000

B. $193,000

C. $175,000

D. $150,000

Question #14

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

A. $250,000

B. $100,000

C. $125,000

D. $500,000

Question #15

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

A. remains undisturbed for five years, starts a five year redemption period and is sold to the state.

B. remains undisturbed for five years.

C. starts a five year redemption period.

D. is sold to the state.

Question #16

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

A. Trade

B. Residential

C. Business

D. Income

Question #17

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

A. Subtract nothing

B. Subtract adjusted cost basis from adjusted sale price

C. Subtract only adjusted price basis

D. Subtract only adjusted cost basis

Question #18

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

A. business license tax.

B. business property tax.

C. business stamp tax.

D. business transfer tax.

Question #19

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

A. is a condominium.

B. is a second residence.

C. has a homeowner’s exemption filed on it.

D. has been converted into rental property.

Question #20

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

A. interest on a trust deed.

B. property taxes.

C. depreciation.

D. prepayment penalties

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