1. 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  C. Mello-Roos Liens
B. Bond Act Issuance                 D. Vrooman Act Bonds

2. With regards to depreciation of land, which of the following is true according to income tax laws?

A. The land cannot be depreciated, but the improvements can
B. The land can be depreciated, but not the improvements
C. The land and improvements can be depreciated
D. Investment property cannot be depreciated

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

A. is a second residence              C. has a homeowner’s exemption filed on it
B. is a condominium    D. has been converted into rental property

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

A. 1%      C. 5%
B. 2%                           D. 10%

5. When do property taxes become a lien (before the fiscal year starts)? (Pg. 401)

A. January 1st       C. November 1st
B. July 1st                     D. February 1st

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

A. March 1st      C. December 10th
B. July 1st                   D. November 10th

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

A. Charitable         C. Medical or educational
B. Religious                D. All of the above

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

A. 50 cents per $500                     C. $1 per $1,000
B. 55 cents per $500                     D. none of the above

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

A. Interest only                               C. Principal only
B. Principal and interest                     D. All of the above

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

A. $ 100,000              C. $ 250,000
B. $ 125,000                 D. $ 500,000

11. The sale of real estate in which the payments for the property extending more than one calendar year is called:

A. a tax deferred exchange      C. installment sale
B. sale-leaseback                  D. none of the above

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

A. is sold to the state   C. remains undisturbed for five years
B. starts a five year redemption period      D. all of the above

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

A. $193,000    C. $175,000
B. $190,000                     D. $150,000

14. A married couple can avoid paying taxes on up to what amount of profit from the sale of a residence?

A. $ 100,000      C. $ 250,000
B. $ 125,000          D. $ 500,000

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

A. Residential C. Trade
B. Income D. Business

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

A. Subtract adjusted cost basis from adjusted sale price
B. Subtract only adjusted cost basis
C. Subtract only adjusted price basis
D. Subtract nothing

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

A. at a higher rate   C. at a more regressive rate
B. at the same rate             D. at a lower rate

18. 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. tax free C. boot
B. booty                         D. none of the above

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

A. business license tax      C. business stamp tax
B. business transfer tax                D. business property tax

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

A. interest on a trust deed     C. property taxes
B. depreciation         D. prepayment penalties