Ch 14 CA RE Practice Flashcards Preview

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Flashcards in Ch 14 CA RE Practice Deck (29)
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1
Q
Which of the following allows property to be transferred between family members without being taxed on the first million dollars of market value…?
AProposition 11
BProposition 58
CProposition 60
DProposition 90
A

B Proposition 58

2
Q
Proposition 13 was enacted in…?
A1964
B1968
C1978
D1991
A

1978

3
Q

Landscaping is an example of a capital improvement…?
AT (True)
BF (False)

A

true

4
Q
In order to qualify for the primary residence capital gains tax exemption, the owner must have lived in the house for ………. out of the previous 5 years?
A1
B2
C3
D4
A

2

5
Q

A time-share is an example of a secondary residence…?
AT (True)
BF (False)

A

true

6
Q

Boot is considered taxable income…?
AT (True)
BF (False)

A

(True)

7
Q
The value of property used to determine the amount of gain or loss realized by an owner upon sale of the property is known as the…?
ADepreciated basis
BNet basis
CAdjusted basis
DGross basis
A

Adjusted basis

8
Q
For depreciation purposes, the value of land can be determined using which of the following methods…?
AAssessed value method
BAppraisal method
CContract method
DAll of the above
A

All of the above

9
Q

What refers to the original cost or other basis of property, reduced by depreciation deductions and increased by capital expenditures?

A

Adjusted Basis or Adjusted Tax Basis

10
Q
Non-residential property is considered to have a useful life of…?
A27.5 years
B29 years
C35 years
D39 years
A

39 years

11
Q
Residential property is considered to have a useful life of…?
A27.5 years
B29 years
C35 years
D39 years
A

A 27.5 years

12
Q
Cash received in a tax-deferred exchange is known as…?
ACapital gain
BAsset
CConversion
DBoot
A

Boot

13
Q
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…?
AAppreciation
BDepreciation
CCredit
DDebit
A

B Depreciation

14
Q
Owner occupied residential properties are entitled to a ………... homeowner’s tax exemption?
A2000
B5000
C7000
D10000
A

C 7000

15
Q

Proposition 90 is only available in participating counties…?
AT (True)
BF (False)

A

(True)

16
Q
This Proposition benefits citizens 55 and older…?
AProposition 11
BProposition 13
CProposition 60
DProposition 137
A

C Proposition 60

17
Q

The agent is considered an __a__ of the broker. The broker must carry __b__ in case something happens. The IRS see the agent as an __c__. When you have a commission check, set up a tax saving account to put __d__% of the commission check into the account?

A

a) employee
b) worker’s compensation
c) independent contractor
d) 20%

18
Q

What is the loss of value of property brought about by age, physical deterioration or functional or economic obsolescence?

A

Depreciation

19
Q

Economic depreciation is the same as tax deprecations?

A

False

20
Q

Economic Depreciation results from the following 3 things?

A

Physical Deterioration
Functional Obsolescence
Economic Obsolescence

21
Q

what is the loss in value caused by unrepaired damage or inadequate maintenance?

A

physical deterioration

22
Q

The loss in value due to resulting from functional

problems caused by age or poor design?

A

functional obsolescence

23
Q

A loss in value due to factors away from the subject property but adversely affecting the value of the subject property

A

ECONOMIC OBSOLESCENCE

24
Q

A term used for accounting purposes to identify the amount of the decrease in value of a property that is allowed for tax purposes

A

tax depreciation

25
Q

What prop allows spouses or domestic partner, including kids, grandkids, step kids transfer to one another up to $1MM market value without reassessment property tax?

A

prop 58

26
Q

What prop allows 55+ to downsize and a taxpayer can transfer current base year tax to a replacement?
Both property must be in the same county, 55+, original house qualifies for the transfer, new home equal or lower

A

60 prop

27
Q

What prop allows other home sellers/buyers to go to other counties from participating counties such as Alameda, LA, OC, Santa Clara, San Diego, Ventura?

A

prop 90

28
Q

What is at resale of a capital item, the amount by which the net sale proceeds exceed the adjusted cost basis (book value). Used for income tax computations. Gains are called short or long term based upon length of holding period after acquisition. Usually taxed at lower rates than ordinary income.

A

capital gain

29
Q

What is The ability to deduct expenses on improvements made to income producing property

A

Depreciation