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Real Estate Principals lesson 9

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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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