Question 1

Choose the one most appropriate answer for each.
-income tax savings that an investor can produce for its owner

Accepted Answer

A) accelerated depreciation 
B) active investor 
C) appreciation 
D) at-risk rules 
E) blind pool
F)cash flow
G)cash-on-cash
H)downside risk
I)equity build-up
J)GLITAMAD
K)investment strategy
L)leverage
M)master limited partnership
N)negative cash flow
O)negative leverage
P)non-recourse financing
Q)passive investor
R)prospectus
S)straight-line depreciation
T)tax shelter 
A) accelerated depreciation 
B) active investor 
C) appreciation 
D) at-risk rules 
E) blind pool
F)cash flow
G)cash-on-cash
H)downside risk
I)equity build-up
J)GLITAMAD
K)investment strategy
L)leverage
M)master limited partnership
N)negative cash flow
O)negative leverage
P)non-recourse financing
Q)passive investor
R)prospectus
S)straight-line depreciation
T)tax shelter

Question 2

In an effort to encourage individuals to rebuild older structure, Congress has had a policy of giving ____________________ tax credits.

Accepted Answer

The answer of In an effort to encourage individuals to...

Question 3

Tax shelter in real estate is not available for rent houses.

Accepted Answer

A) True 
 B)False

Question 4

If an investor wanted to put leverage to its best advantage, he would purchase property by investing all of his own cash and borrowing as little as he can.

Accepted Answer

A) True 
 B)False

Question 5

In a partnership, the risk of losing one's money is referred to as a ____________________ risk.

Accepted Answer

The answer of In a partnership, the risk of losing...

Question 6

A United States taxpayer can, on his income tax report, deduct depreciation on a tenant occupied suburban home.

Accepted Answer

A) True 
 B)False

Question 7

The limited partnership has become popular as a means of owning real estate because of

Accepted Answer

A)  limited ability to finance large properties. 
B)  maximum management responsibility. 
C)  direct pass-through of profits. 
D)  unlimited liability. 
A)  limited ability to finance large properties. 
B)  maximum management responsibility. 
C)  direct pass-through of profits. 
D)  unlimited liability.

Question 8

To be considered a good investment, when a property that has a negative cash flow is sold there must be a substantial increase in property value.

Accepted Answer

A) True 
 B)False

Question 9

Equity buildup in a property can be the result of mortgage reduction and appreciation.

Accepted Answer

A) True 
 B)False

Question 10

Choose the one most appropriate answer for each.
-a plan to balance the returns available with the risks that must be taken to achieve those returns

Accepted Answer

A) accelerated depreciation 
B) active investor 
C) appreciation 
D) at-risk rules 
E) blind pool
F)cash flow
G)cash-on-cash
H)downside risk
I)equity build-up
J)GLITAMAD
K)investment strategy
L)leverage
M)master limited partnership
N)negative cash flow
O)negative leverage
P)non-recourse financing
Q)passive investor
R)prospectus
S)straight-line depreciation
T)tax shelter 
A) accelerated depreciation 
B) active investor 
C) appreciation 
D) at-risk rules 
E) blind pool
F)cash flow
G)cash-on-cash
H)downside risk
I)equity build-up
J)GLITAMAD
K)investment strategy
L)leverage
M)master limited partnership
N)negative cash flow
O)negative leverage
P)non-recourse financing
Q)passive investor
R)prospectus
S)straight-line depreciation
T)tax shelter

Question 11

Choose the one most appropriate answer for each.
-an acronym that refers to the various phases of the life cycle of improved property

Accepted Answer

A) accelerated depreciation 
B) active investor 
C) appreciation 
D) at-risk rules 
E) blind pool
F)cash flow
G)cash-on-cash
H)downside risk
I)equity build-up
J)GLITAMAD
K)investment strategy
L)leverage
M)master limited partnership
N)negative cash flow
O)negative leverage
P)non-recourse financing
Q)passive investor
R)prospectus
S)straight-line depreciation
T)tax shelter 
A) accelerated depreciation 
B) active investor 
C) appreciation 
D) at-risk rules 
E) blind pool
F)cash flow
G)cash-on-cash
H)downside risk
I)equity build-up
J)GLITAMAD
K)investment strategy
L)leverage
M)master limited partnership
N)negative cash flow
O)negative leverage
P)non-recourse financing
Q)passive investor
R)prospectus
S)straight-line depreciation
T)tax shelter

Question 12

A limited partnership wherein properties are purchased after the limited partners have invested their money is called a ____________________ pool partnership.

Accepted Answer

The answer of A limited partnership wherein properties are purchased...

Question 13

The impact that borrowed funds have on investment return is known as leverage.

Accepted Answer

A) True 
 B)False

Question 14

Choose the one most appropriate answer for each.
-limited partnership that can be traded on a stock exchange nearly as easily as corporate stock

Accepted Answer

A) accelerated depreciation 
B) active investor 
C) appreciation 
D) at-risk rules 
E) blind pool
F)cash flow
G)cash-on-cash
H)downside risk
I)equity build-up
J)GLITAMAD
K)investment strategy
L)leverage
M)master limited partnership
N)negative cash flow
O)negative leverage
P)non-recourse financing
Q)passive investor
R)prospectus
S)straight-line depreciation
T)tax shelter 
A) accelerated depreciation 
B) active investor 
C) appreciation 
D) at-risk rules 
E) blind pool
F)cash flow
G)cash-on-cash
H)downside risk
I)equity build-up
J)GLITAMAD
K)investment strategy
L)leverage
M)master limited partnership
N)negative cash flow
O)negative leverage
P)non-recourse financing
Q)passive investor
R)prospectus
S)straight-line depreciation
T)tax shelter

Question 15

In a typical limited partnership, the organizers are ____________________ partners.

Accepted Answer

The answer of In a typical limited partnership, the organizers...

Question 16

A woman owns an $86,000 house on which she pays $329 per month interest. If she is in a 28% tax bracket, how much less tax will she have to pay per year because she owns it?

Accepted Answer

A)  $131.60 
B)  $653.49 
C)  $1,105.44 
D)  $2,763.60 
A)  $131.60 
B)  $653.49 
C)  $1,105.44 
D)  $2,763.60

Question 17

An investment property was purchased in 2008 for $180,000. The land accounted for 30% of this value. If figured on a 30-year life, what was the book value of this property after one year of straight-line depreciation?

Accepted Answer

A)  $54,000 
B)  $121,800 
C)  $126,000 
D)  $175,800 
A)  $54,000 
B)  $121,800 
C)  $126,000 
D)  $175,800

Question 18

In a typical limited partnership, the organizers are the limited partners.

Accepted Answer

A) True 
 B)False

Question 19

Accelerated depreciation schedules, set up before the Tax Reform Act of 1986 became effective, were grand fathered in and did not change.

Accepted Answer

A) True 
 B)False

Question 20

Two investors buy a house for use as a rental property. Their accountant tells them they can deduct depreciation on 80% of the $76,000 value over 27 1/2 years. How much can they deduct in the third year of ownership?

Accepted Answer

A)  $2,211 
B)  $4,422 
C)  $6,633 
D)  $6,756 
A)  $2,211 
B)  $4,422 
C)  $6,633 
D)  $6,756

Exam 26: Investing in Real Estate

Choose the one most appropriate answer for each. -income tax savings that an investor can produce for its owner

In an effort to encourage individuals to rebuild older structure, Congress has had a policy of giving ____________________ tax credits.

Tax shelter in real estate is not available for rent houses.

If an investor wanted to put leverage to its best advantage, he would purchase property by investing all of his own cash and borrowing as little as he can.

In a partnership, the risk of losing one's money is referred to as a ____________________ risk.

A United States taxpayer can, on his income tax report, deduct depreciation on a tenant occupied suburban home.

The limited partnership has become popular as a means of owning real estate because of

To be considered a good investment, when a property that has a negative cash flow is sold there must be a substantial increase in property value.

Equity buildup in a property can be the result of mortgage reduction and appreciation.

Choose the one most appropriate answer for each. -a plan to balance the returns available with the risks that must be taken to achieve those returns

Choose the one most appropriate answer for each. -an acronym that refers to the various phases of the life cycle of improved property

A limited partnership wherein properties are purchased after the limited partners have invested their money is called a ____________________ pool partnership.

The impact that borrowed funds have on investment return is known as leverage.

Choose the one most appropriate answer for each. -limited partnership that can be traded on a stock exchange nearly as easily as corporate stock

In a typical limited partnership, the organizers are ____________________ partners.

A woman owns an $86,000 house on which she pays $329 per month interest. If she is in a 28% tax bracket, how much less tax will she have to pay per year because she owns it?

An investment property was purchased in 2008 for $180,000. The land accounted for 30% of this value. If figured on a 30-year life, what was the book value of this property after one year of straight-line depreciation?

In a typical limited partnership, the organizers are the limited partners.

Accelerated depreciation schedules, set up before the Tax Reform Act of 1986 became effective, were grand fathered in and did not change.

Two investors buy a house for use as a rental property. Their accountant tells them they can deduct depreciation on 80% of the $76,000 value over 27 1/2 years. How much can they deduct in the third year of ownership?

Nature and Description of Real Estate

Rights and Interests in Land

Forms of Ownership

Transferring Title

Recordation Abstracts and Title Insurance

Contract Law

Real Estate Sales Contracts

Mortgage and Note

Deed of Trust

Lending Practices

The Loan and the Consumer

Sources of Financing

Types of Financing

Taxes and Assessments

Title Closing and Escrow

Real Estate Leases

Real Estate Appraisal

Licensing Laws and Professional Affiliation

The Principal-Broker Relationship: Employment

The Principal-Broker Relationship: Agency

Fair Housing, Ada, Equal Credit, and Community Reinvestment

Condominiums, Cooperatives, Puds, and Timeshares

Property Insurance

Land-Use Control

Real Estate and the Economy

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