Memorize Flashcards
Reproduction Cost
The cost of providing an exact replica of the subject property.
The cost of creating a duplicate or nearly IDENTICAL structure; every physical component must be included.
Think; reproducing you to create your IDENTICAL (but evil) twin! Not, replacing you.
Replacement Cost
REPLACE-SIMILAR - Similar utility
the cost of building a modern equivalent of the subject property.
The cost of a structure of SIMILAR utility; may exclude features or components that do not add to attractiveness or marketability.
What is the 3RD stage of money laundering? Name an example.
Integration
Ex. Use of smurfs - arranging for multiple people to deposit small amounts of cash at different financial institutions
Criminals are vulnerable when they possess large amounts of cash that can link them to an underlying crime, so by placing it into the financial system, they are better able to transfer and manipulate their funds.Ex. Blending.
- using dirty money to repay loans
- using dirty money for gambling (and then converting the chips back into cash)
- blending dirty money with clean mon
What is the 2nd stage of money laundering? Name an example.
Three stages in the money laundering process.
The 2ND stage is layering
Examples: cash deposits in other bank accounts, Split and merge between bank account
Converting the criminal funds into another form in order to conceal the criminal origins of the proceeds. Most complicated part of the money laundering process:
- Involves several complex transactions
- May involve sophisticated professionals (lawyers, accountants, investment
bankers)
Name the 3rd stage in the money laundering process.
The 3RD stage is integration, which involves reintroducing and reintegrating the laundered funds into the legitimate economy to create the perception of legitimacy and having the funds appear to have been legally earned.
Ex. Reintroducing
Reintroducing and reintegrating the laundered funds into the legitimate economy to
create the perception of legitimacy and having the funds appear to have been legally
earned
Examples:
* May renovate a property by paying cash, with the sale of the improved property and the resulting profit appearing to be legally earned
- Purchasing high value item
- For example, a criminal may renovate a property by paying cash from drug trafficking to tradespeople, with the sale of the improved property and the resulting profit appearing to be legally earned.
GST (Goods & Services Tax) - What are 4 key principals to GST (under the excise act).
- 90 days to dispute (Tax court>Fed appeal> Supreme - T.A.S)
- 5%, Federal
- Buyer pays, collected by the seller - If not, seller become equally liable.
- Value added - Final value from the production of an item.
PTT (Property transfer tax) - What are the three levels of tax? Name the tax exemption.
- 1% on first $200,000 (incl. $200,000)
- 2% on remainder greater than $200,000 - $2 million.
- 3% on fair market value greater than $3 million.
Exceptions; First time home buyers (Canadian, first home world wide, primary res, less than $500).
Taxable Gains (Capital Gains) - What is it? Name 3 differences between business income and Capital Gains.
Tax on the profit of selling real estate as an investment.
- Not primary residence (1 year min)
- 50% of profit, not total.
Difference between business income:
F-inances used (Ex. short term fin)
L-ength owned
I-nterest in property
I-ntent of owner
P-rofessional background
M-otivation
Speculation and Vacancy Tax (SVT) - How much is it? What are three exceptions?
Used to turn vacant and under utilized homes into homes for people who work and live in BCs urban centres.
- 0.5% Canadians
- 2% Foreign Entities
- People who own real estate but don’t live in it for 1 year.
- Exemptions;
1. Rental - must be occupied by a tenant for at least 6 months.
2. Major home renovations and life events (death, divorce, bankruptcy)
3. Principle Residence
Empty Homes Tax (EHT) - How long does a home need to be empty for? How much is it?
A Vancouver based tax that applies to homes vacant for 6 months of the year. 3% in addition to regular property tax.
Ex.
E-H-T (1,2,3%)
Tax Deferrals - What four people apply to tax deferrals? Name 4 types of properties?
People;
1. Widows (25% equity)
2. 55 plus (25% equity)
3. Disabled (15% equity)
4. Supporting Children (15% equity)
Places;
1. Schools
2. Cemeteries
3. Farms
4.Golf Courses
5. Forest Land
6. Owner by Crown
What are the 3 requirements for negligent misrepresentation to occur?
- There must be an assertion of fact.
- The assertion must be false.
- The assertion must have been material to the formation of the contract, meaning it must have reasonably influenced the other party to enter into the contract.
- Even if made negligently.
Ex.
False Facts that cost Money!
Watts =
1.) What is the formula?
2.) What are Watts?
1.) Watts = Volts × Amps
2.) a measure of power or consumption; electrical usage is measured in watts
Ex. Cousin Wattson, was appalled at my consumption, and wasn’t sure what his parents Volts and Amps were doing.
AMPS =
1.) What is the formula?
2.) What are Watts?
1.) Amps = Watts ÷ Volts
2.) A measure of the rate of current FLOW or quantity of electricity per unit of time; the service capacity of a house is measured in amperes (amps)
EX. Aunt Ampy was teaching me about my period, by explaining my FLOW.
Volts =
1.) What are Volts?
1.) a measure of electrical potential or PRESSURE of current flow.
Uncle Volt, was going to get tampons and needed to know the PRESSURE of flow to know what size to get.
As one lowers a discount (or expected yield) rate, the present value of a given series of future payments does which of the following?
- It decreases.
- It could go up or down depending on the timing of the payments.
- It increases.
- It remains constant.
Option (3) is correct because the payments of a loan contract are calculated based on a contract yield rate. If the discount, or expected yield rate decreases, the present value of the given contracted payments increases.
Options (1), (2), and (4) are incorrect for this reason.
Ex.
You can visualize this concept by thinking about it in terms of the time value of money. When the discount rate is lowered, it means that the value of money in the future is worth more in present terms. Therefore, the present value of future payments increases because those future payments are now considered more valuable in present terms.
For example, if you have a series of future payments that are discounted at a lower rate, it means that those payments are worth more to you now than they would be if the discount rate was higher. This is why the present value of the future payments increases when the discount rate is lowered.
You can also use financial calculators or spreadsheets to perform calculations and see how the present value of future payments changes as you adjust the discount rate. This can help you visualize the concept in a more concrete way.
[Chapter 16]
Name consumer good from least Sought to most Sought.
- Unsought (Do not necessarily want or know about - burial insurance)
- Convenience goods (Frequently purchased - groceries)
- Shopping goods (Comparison shopping - Tv’s, computers)
- Specialty goods (Complex - Rolex, heart surgery)