Chapter 2.5 Quiz (8% Of The Exam)
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- 1.The due date and delinquent date of the second installment of real property taxes in California, are respectively:
- A.
November 1 and December 10
- B.
July 1 and November 1
- C.
February 1 and April 10
- D.
January 1 and March 10
- 2.Which of the following are property tax exemptions stated in the California law?
- A.
Single family residence
- B.
Occupied single family residence
- C.
Owner occupied single family residence
- D.
Any of the above
- 3.Which of the following would have the least impact on property taxes?
- A.
New development
- B.
Compacted population density
- C.
Tax deferment
- D.
A recorded homestead
- 4.Special assessments levied under the Street Improvement Act of 1911 may be used for any of the following purposes except:
- A.
New drainage and sewer systems
- B.
To purchase vacant land
- C.
Build off-site local improvements
- D.
Improve street lighting
- 5.The difference between property taxes and special assessments is that:
- A.
Assessment liens are always subordinate to property tax liens
- B.
Assessment liens can only be levied by local improvement districts
- C.
Foreclosure of assessment liens can only be achieved by court foreclosures
- D.
Special assessments are levied for the cost of specific local improvements, while property tax revenue goes into the general fund
- 6.The marginal tax rate:
- A.
Is the total income tax a person must pay
- B.
Is the minimum income tax rate a person must pay
- C.
Determines the tax rate applied to the next dollar earned
- D.
None of the above
- 7.Mr. Smith purchased an apartment building for $180,000. The listed price was $200,000. Mr. Smith considered this a good deal on his part, since he only put $18,000 down and acquired a new first trust deed for the difference. The tax assessed value was indicated at $130,000. Mr. Smith's cost basis for income tax purposes would be:
- A.
$18,000
- B.
$130,000
- C.
$180,000
- D.
$200,000
- 8.The term "tax shelter" refers to:
- A.
Mortgage relief
- B.
Real property taxes
- C.
Interest income
- D.
Income taxes
- 9.A homeowner sold his personal residence and took a $30,000 loss on the sale. For federal income tax purposes:
- A.
He may not deduct the loss on the sale of his personal residence from his income tax
- B.
40% of the loss is tax deductible
- C.
He can deduct the $30,000 capital loss from any capital gain received during the tax year
- D.
$10,000 of the loss is tax deductible
- 10.Which of the following is true regarding the depreciation of land under federal income tax law?
- A.
Land may be depreciated by 125% declining balance method
- B.
An owner may deduct the accrued depreciation of land over time
- C.
Land may be depreciated by the sum of the year digits method
- D.
Land cannot be depreciated under federal income tax law
- 11.Kim recently bought a commercial office building. What is the minimum period of time in which she may depreciate the building for federal income tax purposes?
- A.
27.5 years
- B.
39 years
- C.
40 years
- D.
50 years
- 12.Brandon owns a large apartment complex that he wants to exchange for another property so he will be able to defer paying income taxes in the year of the exchange. He should exchange his apartment complex for:
- A.
A personal residence with a loan on it equal to it or greater than the mortgage on his apartment complex
- B.
A less valuable apartment complex and assume a smaller loan than the mortgage on his current apartment complex
- C.
A more valuable apartment complex, assuming a larger loan and paying cash boot to balance the equities
- D.
A less valuable apartment complex, receiving money from the other party to compensate for any difference in equities
- 13.The buyer of a commercial building in a sale-leaseback transaction would be least concerned with:
- A.
Access to transportation for the property
- B.
Zoning of the property
- C.
Physical condition of the improvements
- D.
The seller's depreciated book value of the improvements
- 14.A grant deed has been executed once it has been:
- A.
Signed by the grantor
- B.
Delivered to escrow
- C.
Recorded
- D.
Delivered to the grantee
- 15.Which of the following is one of the implied warranties contained in the grant deed?
- A.
Title is free from all encumbrances
- B.
Grantor has not conveyed title to any other person
- C.
Property taxes are current
- D.
The property has been homesteaded
- 16.Why are warranty deeds rarely used in California, but commonly used in other states?
- A.
The buyer may recover double damages when a grant deed is used
- B.
Warranty deeds are illegal in California
- C.
Recourse against a title company works better than trying to collect from the grantor
- D.
The law favors the use of the grant deed because the express covenants run with the land, while covenants of the warranty deed are personal to one particular buyer
- 17.Concurrent ownership of real property by two or more parties, each of whom has an undivided interest (not necessarily equal) without right of survivorship, would be described as:
- A.
Community property
- B.
Joint tenancy
- C.
Tenancy in common
- D.
Ownership in severalty
- 18.An uncle bought a home two years ago and purchased a standard title insurance policy. The uncle died and willed the home to his nephew. During probate it was discovered there was a defect in the title to the home because the grantor who sold the home to the uncle had been legally incompetent at the time of the sale. The title company denied any liability under the title policy. The probable outcome of this lawsuit will be:
- A.
The title company was liable because its obligation under the policy is not terminated by the death of the uncle
- B.
The title company was not liable because of the standard title insurance policy does not cover damage resulting from an incompetent grantor
- C.
The title company was liable if the nephew filed his lawsuit within one year of the uncle's death
- D.
Title company was not liable because the death of the policy holder terminated the obligation to defend the title
- 19.Which of the following is incorrect in regards to a "metes and bounds" description?
- A.
Using a watercourse as a boundary
- B.
Metes and bounds is a method used to legally describe land, not measure it
- C.
Using a boundary as a boundary
- D.
"metes" are boundaries and "bounds" are measurements
- 20.A 36 mile square contains how many townships?
- A.
1 township
- B.
6 townships
- C.
18 townships
- D.
36 townships
- 21.In the typical escrow, once all the conditions of the escrow have been satisfied, the escrow officer becomes:
- A.
An advisor to both the buyer and the seller
- B.
An advocate for the best interests of both principals
- C.
A separate agent for each party, whereas during escrow, the escrow officer was a dual agent for both parties
- D.
None of the above
- 22.A real estate broker placed a deposit received with an offer to purchase property in his trust account. After the seller accepted the offer, but before escrow was opened, the buyer informed the broker that she had terminated the contract and demanded the return of her deposit. The broker, unsure of what was the proper course of action, turned the deposit over to the court. This would be an example of:
- A.
A surrender action
- B.
An interpleader action
- C.
An equitable assignment
- D.
An estoppel disposition
- 23.When examining a properly prepared escrow closing statement, a broker would discover that the purchase price would appear as:
- A.
A debit to the buyer
- B.
A debit to the seller
- C.
A credit to the seller and to the buyer
- D.
A credit to the buyer
- 24.A home sold for $90,750. The buyer assumes an existing $30,000 trust deed and paid cash for the balance of the purchase price. If the documentary transfer rate is $.55 per $500 of consideration, what was the documentary transfer tax?
- A.
$33
- B.
$66.83
- C.
$67.10
- D.
$100.10
- 25.For property tax purposes, when is property normally reassessed?
- A.
Whenever the property is sold
- B.
Only when the building is remodeled
- C.
Every year
- D.
Every three years
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