ENGRADE Chapter 19

Question 1

When preparing an annual income tax return, a homeowner may be able to deduct all of the following

Answer 1

Real Estate Taxes

Mortgage interest on a 1st home

Mortgage interest on a 2nd home.

Question 2

Which of the following items related to their primary residence would a homeowner get to deduct from their annual income taxes?

Answer 2

Interest on their home loan

Question 3

In order to be entitled to an owner occupied capital gain exclusion related to a primary residence which of the following statements is correct

Answer 3

The owner must occupy the home for TWO YEARS out of the last five years prior to the sale

Question 4

The amount of capital gains exclusion for the sale of a principle residence is limited to

Answer 4

a gain of 250K per individual and a $500K gain per married couple per residence

Question 5

The depreciation which is allowable on investment property is a tax deduction in

Answer 5

STRAIGHT LINE DEPRECIATION

Question 6

Investors may be able to defer taxable events on investment property by following the IRS prescribed rules for

Answer 6

1031 tax deferred exchanges

Question 7

A homeowner gets to deduct all of the following as tax deductible expenses related to the ownership of a primary residence

Answer 7

Real estate taxes

Interest

Some allowable closing costs

(NOT maintenance)

Question 8

When asked a specific question about tax consequences the BEST response for a real estate professional to make to their client is to

Answer 8

I recommend that you seek the advice of an accountant, tax professional, or attorney.