Deck 13: Introduction to Taxation

Question 1

City Council members:
(a) set city property tax rates as allowed by law
(b) establish city budgets
(c) both a and b
(d) neither a nor b

Answer 1

C

Question 2

Rent controls, building moratoriums, and coastal controls are examples of government use of:
(a) police power
(b) eminent domain
(c) zoning
(d) subdivision regulations

Answer 2

A

Question 3

The subdivision law administered by the California Real Estate Commissioner, who requires the issuance of a public report is the:
(a) Subdivision Map Act
(b) Subdivided Lands Act
(c) Subdivision Report Act
(d) Subdivided Interstate Act

Answer 3

B

Question 4

The proposition that allows certain homeowners to transfer their property tax base to another home in the same county is:
(a) Proposition 13
(b) Proposition 57
(c) Proposition 60
(d) Proposition 90

Question 5

For a homeowner, which of the following is tax deductible?
(a) fire insurance premiums
(b) roof repairs
(c) mortgage interest
(d) two of the above are deductible for homeowners

Question 6

The California law that makes it unlawful for businesses to illegally discriminate is the:
(a) Fair Housing Act
(b) Rumford Act
(c) Unruh Act
(d) Housing Financial Discrimination (Holden) Act

Question 7

If a person purchases the right to occupy a unit for a certain designated period each year, this is called:
(a) undivided ownership
(b) time share ownership
(c) cooperative ownership
(d) estate for years ownership

Question 8

What would be an example of a subdivision of air space?
(a) planned unit development
(b) community apartment
(c) stock cooperative
(d) condominium

Question 9

Businesses, including real estate offices are directly affected by which state anti discrimination law? a() Unruh Civil Rights Act
B() Rumford Act
C() Holden Act
D() Civil Rights Act of 1968

Question 10

The Subdivision Map Act is enforced by
(a) the Real Estate Commissioner
(b) Housing and Urban Development (HUD)
(c) the local city or county
(d) the Attorney General

Question 11

The second installment of real property taxes is delinquent if not paid by:
(a) November 1
(b) December 10
(c) February 1
(d) April 10

Question 12

A frequently used special assessment law is:
(a) the Street Improvement Act of 1911
(b) the Mello-Roos Community Facilities Act of 1982
(c) Proposition 13
(d) Proposition 60

Question 13

A property was valued at $500,000 for property tax purposes. According to Proposition 13, what would be the maximum value for property tax purposes in two years, assuming the owner did not make capital improvements?
(a) $502,420
(b) $504,010
(c) $506,220
(d) $520,200

Question 14

Which law prohibits lenders from "redlining"?
(a) Fair Housing Act
(b) Rumford Act
(c) Unruh Act
(d) Housing Financial Discrimination (Holden) Act

Question 15

Which of the following requires a certain number of units to be set aside for people of low and moderate income?
(a) Holden Act
(b) Fair Housing Act
(c) comprehensive zoning
(d) inclusionary zoning

Question 16

Which of the following is true?
(a) a person cannot use a homeowner's exemption and a veteran's exemption on the same home
(b) real property taxes become a lien on the first Monday in March
(c) a 12% penalty is added for delinquent property taxes
(d) California has special property tax exemptions for senior citizens 45 years or older

Question 17

The type of development in which an owner obtains an individual deed to his or her living unit and has an undivided interest in all the land and common areas is a:
(a) planned unit development
(b) community apartment
(c) stock cooperative
(d) condominium

Question 18

Under certain conditions, married couples may exempt up to how much in gains from the sale of a home?
(a) $500,000
(b) $250,000
(c) $125,000
(d) $50,000

Question 19

The homeowner's exemption, excluding local assessments, saves approximately how much in property taxes?
(a) $100
(b) $80
(c) $70
(d) $40

Question 20

A seller's current real estate tax is $1,175 per year including the homeowner's exemption. The condo is sold to a buyer for $197,500. Assuming no local assessments are added to the tax bill, what will be the buyer's real property tax bill including the homeowner's exemption?
(a) $1,975
(b) $1,905
(c) $1,175
(d) $1,050

Question 21

When a special assessment is made on a piece of property under the Street Improvement Act of 1911:
(a) property owner can deduct principal and interest
(b) it is based on the front footage of the property
(c) it is appraised as per the amount of square footage
(d) assessment must be paid within six months

Question 22

Property taxes become a lien on:
(a) July 1
(b) November 1
(c) February 1
(d) January 1

Question 23

A and B have purchased agricultural land as joint tenants. A is farming the entire plot, while B is using no part of it. Regarding property taxes:
(a) A is liable for all the taxes
(b) B is not liable for any taxes
(c) B is liable for one-half of the taxes
(d) both owners are liable for taxes

Question 24

Since the passage of Proposition 13, the county tax assessor is required to value property for real property taxes on the basis of the:
(a) fair loan value
(b) adjusted book value
(c) current market value
(d) full cash value

Question 25

Under certain conditions, a single homeowner may exempt up to how much in gains from the sale of a home?
(a) $500,000
(b) $300,000
(c) $250,000
(d) $125,000

Question 26

To qualify for installment sale reporting, a seller must:
(a) trade up to a more expensive property
(b) carry paper
(c) acquire like for like property
(d) receive no boot

Question 27

A law used to finance public services in newly developed areas that can lead to high assessments for the affected owners is called:
(a) Mello-Roos
(b) Holden-Aspen
(c) Alvareze-Greene
(d) Brown-Miller

Question 28

In a 1031 real estate exchange, a tax liability arises if the person exchanging receives:
(a) like kind property
(b) boot
(c) income property
(d) investment property

Question 29

The county tax assessor's duty is to determine:
(a) the tax rate to be applied to assessed values
(b) assignment of parcel numbers to current secured tax rolls
(c) tax to be paid by the property owner
(d) value of the property for tax purposes

Question 30

Ad valorem, is a Latin phrase that means:
(a) according to value
(b) buyer beware
(c) and others
(d) none of the above

Question 31

Federal income taxes are referred to as a:
(a) progressive tax
(b) regressive tax
(c) proportionate tax
(d) equalized tax

Question 32

Private property is deeded to the state for delinquent property taxes after:
(a) 1 year
(b) 2 years
(c) 3 years
(d) 5 years

Question 33

Which can be depreciated for income tax purposes?
(a) an owner-occupied condominium unit
(b) rental property
(c) vacant land
(d) an owner-occupied single-family residence

Question 34

The amount paid as a commission for the sale of an owner-occupied home can be deducted on the seller's federal income tax as:
(a) a long-term capital gain
(b) a standard deduction
(c) an expense of sale
(d) an ordinary loss

Question 35

This event could trigger a new property tax assessment:
(a) a refinance by the current owner
(b) a real estate transfer
(c) a construction loan
(d) the rental of a single family residence

Question 36

When foreigners sell U. S. property, the Foreign Investment in Real Property Tax Act (FIRPTA) may require what percentage to be withheld from the sale proceeds?
(a) 3 1/3%
(b) 5%
(c) 10%
(d) 13%

Question 37

For investors, losses on the operation of rental real estate are what type of losses?
(a) passive
(b) active
(c) actual
(d) portfolio

Question 38

An investor who has owned a property for two years and then sells for a gain most likely will pay:
(a) pay capital gains taxes
(b) defer the payment of taxes
(c) pay only California, not federal taxes
(d) not pay taxes as a sale for cash qualifies as a 1031 exchange

Question 39

Property owners can appeal the size of their property tax bill to an assessments appeals commission, or in some areas to the:
(a) local board of equalization
(b) franchise tax board
(c) board of supervisors
(d) franchise property tax agency