Custom Quiz Transfer Flashcards
(37 cards)
By which means can a person gain title to real property? A) Littoral rights B) Appurtenance C) Accession D) Riparian rights
C) Accession
Title to real property can be acquired by accession-the addition to property through the efforts of man or by natural forces. Riparian and littoral rights are water rights, which are appurtenances to real property.
For federal income tax purposes a property owner can deduct all of these expenses in computing annual net income EXCEPT A) interest paid on a mortgage. B) the manager's salary. C) depreciation. D) a wooden fence.
D) a wooden fence.
A property is deeded to "John Jones, et ux." The Latin phrase et ux means A) amount over and above. B) and wife. C) and others. D) without recourse.
B) and wife.
All of these statements are correct concerning probate sales of real property EXCEPT
A) the representative of the estate may enter into an exclusive listing with the broker with the approval of the court.
B) an offer can be accepted by the representative of the estate with the approval of the court.
C) commissions for brokers negotiating sales are determined by the probate code according to prearranged schedules based on selling price.
D) the first bid in a probate sale must not be less than 90% of the court’s appraisal.
C) commissions for brokers negotiating sales are determined by the probate code according to prearranged schedules based on selling price.
The probate code does not have a prearranged commission schedule. Commissions are set at the discretion of the court. The representative of the estate may, with the court’s approval, give a broker an exclusive listing, not to exceed 90 days; an offer must be at least 90% of the court’s appraisal. The court may then approve the sale and set the commission.
Able died leaving no heirs but had willed Blackacre Ranch to Baker. Talbot was in possession of Blackacre under an existing lease that had two years to run. During the probate of Able’s estate, the court found the will to be invalid. Under these circumstances, title to Blackacre would
A) pass to Baker since it was Able’s intent.
B) pass to Talbot since he is in possession.
C) pass through an action by one or more of the heirs for declaratory relief.
D) pass by statutory provisions by a court of proper jurisdiction.
D) pass by statutory provisions by a court of proper jurisdiction.
What best defines adjusted basis of a property for income tax purposes?
A) Acquisition cost plus capital improvements plus depreciation
B) Acquisition cost
C) Acquisition cost plus capital improvements
D) Acquisition cost plus capital improvements minus depreciation
D) Acquisition cost plus capital improvements minus depreciation
A person who has been judicially declared incompetent and who was bequeathed three properties by his brother
A) can accept title to real property given to him in a will.
B) can accept title only if it is placed with a trustee.
C) cannot receive title to real property but can receive title to personal property.
D) cannot receive title to real property because of his incompetency.
A) can accept title to real property given to him in a will.
Escrow companies normally base their prorations on a year of A) 350 days. B) 355 days. C) 360 days. D) 365 days.
C) 360 days.
A buyer of a business opportunity would obtain a Certificate of Clearance from the A) State Board of Equalization. B) Franchise Tax Board. C) County Tax Assessor. D) Secretary of State.
A) State Board of Equalization.
The Board will issue the Certificate of Clearance if the seller of a business has paid his sales tax in full.
When standard coverage is extended by the coverage of an ALTA policy, the insurer is liable for all of these EXCEPT A) liens of record. B) unrecorded mechanics' liens. C) unrecorded easements. D) zoning restrictions.
D) zoning restrictions.
Mr. Newton owned a six-unit dental building and lot valued at $225,000. The adjusted cost basis was $185,000 and the property was mortgaged for $137,000. He exchanged with the owner of a store building valued at $198,000 with a $125,000 mortgage. Newton also received $25,000 cash boot. What is Newton's actual and taxable gain? A) $78,000-$54,000 B) $73,000-$43,000 C) $50,000-$37,000 D) $50,000-$13,000
C) $50,000-$37,000 (1) Newton’s Dental Building Store Building $225.000 Market value $198,000 –137,000 Mortgage –125,000 $ 88,000 Equity $ 73,000 Cash 25,000 (2) Newton “gets” $198,000 Property (like-kind) \+ 12,000 Mortgage relief \+ 25,000 Cash 37,000 Boot* $235,000 Total (3) Less his basis in dental bldg. –185,000 50,000 realized (actual gain) *(4) Of which 37,000 is recognized (taxable now)* (5) Leaving $ 13,000 Deferred gain
Who is normally in the weakest position against loss of property due to a claim by an outsider?
A) Holder of an unrecorded quitclaim deed who does not occupy the property
B) Holder of a certificate of title
C) Holder of a recorded deed who rents the property
D) Holder of an unrecorded deed who occupies the property
A) Holder of an unrecorded quitclaim deed who does not occupy the property
An unrecorded deed is considered void as against a subsequent good-faith purchaser who is without notice and who does record or take possession. The two methods of giving constructive notice of a claim of interest are (1) recording and (2) occupying the property. A holder of an unrecorded quitclaim deed who does not occupy the property has done neither. For a holder of a certificate of title, the certificate is indicative that the named holder is the owner of the record.
Green paid $77,000 for a home in a real estate transaction. The lender would lend 80% of the $75,000 value. If the buyer was charged 3% of the selling price for closing costs and made a $1,200 cash down payment, what additional amount of money would the buyer need in order to complete the transaction? A) None of these B) $13,490 C) $15,800 D) $18,110
D) $18,110 Total cost to buyer Purchasing price = $77,000 Closing costs (3% × $77,000) + 2,310 = $79,310 Less proceeds to offset costs Loan (0.80 × $75,000) = $60,000 Down payment \+ 1,200 –61,200 To complete transaction $18,110
When transferring fee simple title to real property that has been financed by a first deed of trust, you must first
A) receive permission from the beneficiary.
B) do none of these.
C) have the grantor sign the deed.
D) pay the beneficiary in full.
C) have the grantor sign the deed.
To transfer fee simple title, encumbered or unencumbered, the grantor must sign the deed. If this is done in violation of a due-on-sale clause, the beneficiary (lender) may call the loan, but cannot prevent the transfer.
Seizure of property for payment of money before judgment is known as a(n) A) lis pendens. B) attachment. C) condemnation. D) writ of execution.
B) attachment.
An attachment is a legal seizure prior to a court action. The instrument employed is a writ of attachment. A lis pendens effectively puts a “hold” on property, but it is not a seizure.
A deed is void at its inception if A) the grantee takes title under an assumed name. B) the grantee is a minor. C) the grantor is legally incompetent. D) none of these are true.
C) the grantor is legally incompetent.
The trustee will deliver to the trustor a A) grant deed. B) quitclaim deed. C) reconveyance deed. D) trustee's deed.
C) reconveyance deed.
A deed made and delivered, but not recorded, is
A) invalid as between the parties.
B) valid as between the parties and valid as to subsequent recorded interests.
C) invalid as between the parties and valid as to third parties with constructive notice.
D) valid as between the parties and invalid as to subsequent recorded interests without notice.
D) valid as between the parties and invalid as to subsequent recorded interests without notice.
Which item would most likely be short rated in escrow? A) Insurance B) Interest C) Real estate taxes D) Trust deed
A) Insurance
The requisites of a grant deed differ from those of a land contract in which way? A) Signature of principals B) Warranties to purchaser C) All of these D) Designation of price
C) All of these
A grant deed carries a warranty to the purchaser; a land contract does not. The grant deed requires the signature of the grantor only; a land contract requires the signature of the vendor and the vendee. A grant deed does not require a designation of the price; a land contract does.
A man owns property free and clear valued at $320,000 with a book value of $220,000. If he exchanges for another property, also free and clear valued at $365,000, and pays no boot, the book value on the second property will be
A) Cannot be computed with the facts given
B) $220,000.
C) $585,000.
D) $365,000.
B) $220,000.
A tax-free exchange is accomplished by transferring the old cost basis to the newly acquired property. Since the taxpayer paid no boot, his book value on the second property would remain $220,000.
Carson acquired title to several properties before his arrest. While in prison, he wanted to convey one property to his son and sell another. How would being in prison affect his ability to convey?
A) He can dispose of his property as he pleases.
B) He must first get permission from the California Adult Authority.
C) It would be hard to acquire title insurance.
D) His conveyance must be approved by an officer of the Department of Corrections.
A) He can dispose of his property as he pleases.
A home sold for $337,000 with a fair market value of $335,000. The seller took a purchase money second trust deed for $325,000 and sold it “without recourse” at a discount of $323,500. The buyer defaulted before the first payment was made. The holder of the second trust deed can
A) look to the seller since the note was usurious.
B) look to the seller since “without recourse” has no effect.
C) foreclose for $323,500.
D) foreclose for $325,000.
D) foreclose for $325,000.
An ALTA extended coverage policy of title insurance would
A) cover easements created during the term of the policy.
B) be limited to stated conditions and title as of the date of issuance.
C) cover encroachments after the date of issuance.
D) protect a lessee who moved onto the property after the date of issuance of title insurance.
B) be limited to stated conditions and title as of the date of issuance.
