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When should tax consciousness begin?
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Marginal tax rate?
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Real Estate 9
Real Estate Principals lesson 9
| Question | Answer |
|---|---|
| When should tax consciousness begin? | Prior to |
| Marginal tax rate? | rate paid on the next dollar earned |
| Long term gain? | assets held for more than 12 months |
| how long does an asset have to be held before being considered long term? | 12 months |
| cost basis? | Un-adjusted basis |
| capital improvement? | investment of money to increase the value of the property or prolong life |
| Depreciation? | ONLY on income,trade,or business property |
| adjusted cost basis = | cost basis + capital improvement - depreciation |
| Allowable expenses? | deductible expenses |
| Is maintenance deductible in allowable expenses? | No |
| Can losses be used as a deduction? | No |
| HOw much is considered excluded gains? | $250,000 single $500,000 married |
| how long must a person live in a home to qualify for excluded gains? | at least 2 years or 2 out of 5 years |
| How often can exclusion be taken? | once in a 2 year period but may be used over and over |
| Can capital improvements be deducted? | no |
| What are capital improvements added to? | the cost basis then depreciated |
| when does a landlord count first and last months rent? | the year collected |
| Operational Loss? | is deductible up to certain limits |
| can capital loss be deducted? | yes |
| Vacancy losses? | Are NOT deduction |
| What type of property can depreciate? | income,trade, or business property |
| What is depreciate based upon? | the cost of improvemnets |
| What does depreciation reduce? | the basis of the property |
| Depreciation applies to? | improvements |
| straight line depreciation method? | losses a constant amount over a projected life span |
| "Tax Free" exchange | pay later |
| Cash boot | difference in equaties in a trade |
| Adjusted cost basis? | The basis of the new is the basis of the old |
| what are the advantages of a sale-lease back? | free equity and ability to write off rent |
| what would a buyer involved in a sale-lease back Not be concerned with? | seller's book value |
| property tax pertains to? | both real and tangible property |
| what should an owner do if he feels his property is over assessed? | appeal to Assessment Appeals Board |
| Public Utilities | are assessed by state board of equalization |
| tax rate? | limited to $1 per $100 assessed value |
| tax calendar | No Darn Fooling Around nov. Dec. Feb. April 1 10 1 10 |
| what happens if taxes are unpaid past june. 30? | property is sold to the state |
| The redemption period lasts? | five years |
| the buyer recieves what after the redemption period | tax deed |
| tax bill? | APN |
| tax bill uses? | an assessor's parcel number (APN) |
| "Ad Valorem" | according to value |
| what happens to taxes when a property is sold? | the property is re-assessed and often results in more taxes |
| Street Improvement act of 1911? | alternative method of payment for special assessments serving an area(streets,sidewalks etc.) |
| How long does an owner have to all or none of the payment by the street improvement act of 1911? | 30 days |
| street improvement bonds? | a method used by sub-dividers to pass the expense of streets on |
| Can street improvement bonds be used to purchase land? | No |
| tax is based on? | consideration |
| the tax rate? | .55 for each $500 |
| Subdivision map act? | gives local authorities control over the physical aspects of a subdivision |
| map Subdivision? | two or more parcels |
| the master plan shows? | streets,districts, and seismic |
| subdivision land act | purpose it to protect |
| land subdivision? | five or more parcels |
| preliminary public report? | pink, can accept refundable deposits |
| final public report | white |
| how can the commissioner stop sales? | by issuing a desist and refrain order |
| who does an impound protect? | the buyer |
| standard subdivision? | 5 or more parcels |
| planned development project? | has common use areas (pool,park) |
| condominium project? | owner owns air space in unit |
| Housing and construction industry is regulated by? | state housing law,local building codes,contractor's state license law |
| where do building permits come from? | the local building department |
| building codes establish? | minimum construction standards for public health safety and welfare |
| In the case of two corresponding codes which applies? | tougher code |
| net worth | the difference between assets and liablilities |
| Net income = | gross income - expenses |
| turnover | number of time inventory is sold |
| advanvced fee for advertising? | must be deposited into a trust account used only for advertising |
| state board of equalization | administers law and receives taxes |
| alcoholic beverage control act | administered by ABC board |
| how much is a general alcohol license | $6,000 |
| how long must a liquor license be kept before being sold? | 2 years and for no more than $6,000 before 5years |
| franchise = | marketing plan |
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