Quiz
Chapter 17
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Perguntas do quiz (20)
1Among the advantages of real estate investment is
- Ailliquidity.
- Bneed for expert advice.
- Chedge against inflation.
- Ddegree of risk.
2Among the disadvantages of real estate investment is
- Aleverage.
- Bneed for physical and mental effort.
- Ctax shelter.
- Dequity buildup.
3The investor's initial cost for the real estate is called
- Acapital gains.
- Bbasis.
- Cadjusted depreciation.
- Dboot.
4The beginning investor would be wise to start with the purchase of
- Avacant land.
- Bresort property.
- Ca shopping center.
- Da nearby multiple dwelling.
5A small multifamily property generates $50,000 in rental income with expenses of $45,000 annually, including $35,000 in debt service. The property appreciates about $25,000 a year. The owner realizes another $5,000 through income tax savings. On this property, the cash flow is
- A$5,000
- B$15,000
- C$25,000
- D$35,000
6In the example above, the owners return is
- A$5,000
- B$15,000
- C$25,000
- D$35,000
7Leverage involves the extensive use of
- Acost recovery.
- Bborrowed money.
- Cgovernment subsidies.
- Dalternative taxes.
8A property's equity represents its current value less which of the following?
- ADepreciation
- BMortgage indebtedness
- CPhysical improvements
- DSelling costs and depreciation
9An investor's marginal tax rate is the
- Atotal tax bill divided by net taxable income.
- Bextra tax if he has too many tax shelters.
- Ctop applicable income tax bracket.
- Dpercentage taxable on an installment sale.
10The primary source of tax shelter in real estate investments comes from the accounting concept know as
- Arecapture.
- Bboot.
- Cdepreciation.
- Dnet operating income.
11For tax purposes the initial cost of an investment property plus the cost of any subsequent improvements to the property, less depreciation, represents the investment's
- Aadjusted basis.
- Bcapital gains.
- Cbasis.
- Dsalvage value.
12The money left in an investor's pocket after expenses, including debt service, have been paid is known as
- Anet operating income.
- Bgross income.
- Ccash flow.
- Dinternal rate of return.
13The investor who secures what the IRS regards as excessive tax shelter may be subject to
- Arecovery.
- Brecapture.
- Calternative minimum tax.
- Dpyramiding.
14Julia Kinder is exchanging her apartment building for an apartment building of greater market value and must include a $10,000 boot to even out the exchange. Which of the following may she use as a boot?
- A$10,000 cash
- BCommon stock with a current market value of $10,000
- CA parcel of raw land with a current market value of $10,000
- DAny of the above if acceptable to the exchangers
15In question 14, which is TRUE?
- AJulia may owe income tax on $10,000.
- BEach party to the exchange may owe tax on $10,000.
- CThe other investor may owe tax on $10,000.
- DNo one owes any tax at this time.
16An investment syndicate in which all members share equally in the managerial decisions, profits, and losses involved in the venture is an example of which of the following?
- AReal estate investment trust
- BLimited partnership
- CReal estate mortgage trust
- DGeneral partnership
17Helen has purchased a dilapidated row house that is 50 years old and of no particular historic value. Helen intends to renovate the row house and live in it. On her renovation expenditures, Helen is entitled to tax credits of
- A$25,000.
- B$0.
- C$12,500.
- D25%.
18If the sale of a business involves any interest in real estate, handling the transaction require a
- AUCC filing.
- Bbulk transfer certificate.
- Cdepreciation allowance.
- Dreal estate license.
19The Bulk Transfer Act requires that the purchaser of a business
- Ahave a real estate license.
- Bnotify creditors before the sale.
- Cconduct a careful inventory of goods.
- Dhave an environmental review before closing.
20After learning of the sale of a business, suppliers who have NOT been paid should take action within
- Aten days.
- Bone month.
- Csix months.
- Done year.
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