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Session 8
Investments and income tax
| Question | Answer |
|---|---|
| Asbestos | Tiny airborne fibers that can cause respiratory diseases. it is FRIABLE. |
| Boot | Taxable, not like kind property used in an exchange, such as cash or other personal property that is used to balance and exchange on real property |
| Brownfield | A property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence pf a hazardous substance, pollutant, or contaminant |
| Capital Gain Income | Income realized from the sale of an asset at a profit. |
| Cash flow before Income taxes | The amount remaining after paying all operating expenses and debt service but before taking into account any income tax effects. |
| CERCLA | Created waste site requirements and established liability for responsible parties (Comprehensive Environmental Response Compensation and Liability Act) |
| Compaction | The process by which soil particles are compressed by rolling, tamping, or vibration in order to provide support of structural elements such as building foundations on roadways |
| Credit Losses | Rent owed but not collected |
| Debt Service | The principal and interest payments on the loan |
| Delayed Exchange | Allows the owner to sell the property and acquire a replacement property within specific time frames. [ |
| Discovery (Due Diligence) | The process of investigating the property to determine if hazardous substances or pollution are present |
| Effective Gross Income | Actual income after deducting vacancy and credit losses from gross scheduled income |
| Expansive Soils | Soils that may absorb water and expand which may exert pressure on a building causing damage |
| FEMA | Federal emergecy management agency |
| Flood Elevation Certificates | Used by FEMA and private insurance companies to rate flood insurance policies. |
| Floodplain | The portions of land located along rivers or streams that are subject to flooding. |
| Gross Scheduled Income | Projected rent if a property is 100% occupied and the rents were collected |
| Lead-Based Paint disclosure | Gotta disclose residential property build before 1978 because it might have lead paint |
| Mold | Airtight windows, backed up sewer or rain gutter, poorly ventilated, highly humid area. |
| Net Operating Income (NOI) | Income remaining after the operating expenses have been deducted from the effective gross income |
| Operating Expenses | Includes fixed costs, such as insurance and salaries, and variable expenses such as utilities and maintenance. does not include debt service, depreciation, income taxes, or improvements |
| Ordinary Income | Any income from salaries wages commissions and interest. |
| Pass-Through Income | Any type of income received by an entity such as an LLC that is not taxed at the level of the entity but "Passes through" to be taxed at the level of the individuals in the entity. |
| Percolation | Refers to the ability of the ground to absorb the drain water. |
| Phase 1 Assessments | The process of inspecting the property, reviewing public records, and interviewing owners and tenants to determine if contaminiation may exist |
| Phase 2 Assessments | After its determined that theres evidence of contamination, samples are taken and analyzed to determine if pollution exists and to what extent |
| Phase 3 Assessments | includes the actual remediation of the contamination. |
| Radon | A naturally occurring odorless, tasteless, and radioactive gas that can cause lung cancer |
| Straight line depreciation | The same amount of depreciation is taken each year/ |
| Superfund Site | A federal fund set up by CERCLA to bear the cost of cleaning up polluted property |
| Vacancies | Units not rented |
| Water Quality Assurance Revolving Fund (WQARF) | Created by Arizona to bear the cost of cleanup for sites not covered by CERCLA |
| Wetlands | Land areas where groundwater is at or near the surface |
| Contract Rent | |
| Conventional Life Estate | |
| Demise | |
| Economic Rent | |
| Estate | |
| Estate (Tenancy) for years | |
| Estate at Sufferance | |
| Estate at will | |
| Estate from period to period | |
| Estate in Remainder | |
| Estate in Reversion | |
| Excess Rent | |
| Fee Simple Absolute | |
| Holdover Tenancy | |
| Lessee | |
| Lessor | |
| Life Estates | |
| Life Tenant | |
| Negative Leasehold | |
| Positive Leasehold | |
| Quiet Enjoyment | |
| Remainderman | |
| Reverter | |
| Sublease (Sandwich Lease) | |
| Trade Fixtures | |
| Waste |
Created by:
Baayangle
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