Taxes & Assessments
How often can a tax exclusion be used?
What is once every 2 years?
The process of completing or closing a real estate transaction?
What is title closing?
What is the Maximum tax on gain if held longer than 12 months? It is ____ percent.
What is 15 percent?
-Held for more than 12 months
- Taxed at long-term capital gains rate
- Additional 3.8% if you make more than $250,000
What are Long-Term Capital Gains?
What are the three divisions of income according to the IRS?
What is Active, Passive, and Portfolio Income?
a final inspection of the property just prior to closing to make certain that:
the premises have been vacated
no damage to the premises have occurred
the seller has left behind any personal property agreed upon in Sales Contract.
the seller has not removed and taken any real property
What is a walk-through?
- When you sell, the cost recovery taken is subject to _____ Tax.
- Maximum of 25% in deductions
- Collected even if the property hasn't depreciated
What is recapture tax?
-Held for 1 year or less
-Taxed at ordinary income tax rates
What are Short Term Capitol Gains?
Taxes that are leveled according to/based on property value
What are Ad Valorem Taxes?
When all parties sign their documents and entrust them to the person in charge (escrow agent/title agent) of the closing for safekeeping; no money is disbursed and the deed is not delivered until all paperwork arrives.
What is a dry closing?
The Internal Revenue Code provides for the deductibility of state and local real estate taxes (along with state income tax) up to _____ on the Federal Income Tax Return.
What is $10,000?
Material adds value in one of the three ways listed.
- Materially adding features, -Extending the life expectancy of the improvement or property, -Adapting or changing a portion of the property to a new use
What are Capital Improvements?
What act authorized the government to tax foreign persons on the sale, exchange, liquidation, redemption, gift, or transfer of U.S. property interest?
What is FIRPTA?
What is the use of a neutral third party, called the escrow agent, who acts on behalf of both buyer and seller to carry out instructions of the sales contract and lending instructions
What is escrow?
The _______ _______ form is required for federally related lenders
- provides disclosures that will be helpful to consumers in understanding
- all of the costs of the transaction
What is the closing disclosure (CD) form?
An accounting of funds to the buyer and the seller at the completion of a real estate transaction.
What is a settlement statement?
Sale of real estate in which the proceeds of the sale are deferred beyond the year of sale.
What is installment method?
What is the division of ongoing expenses and income items between the buyer and the seller?
What is prorating at the closing?
Lenders and mortgage brokers are required to give a new _________ form to a potential borrower within three days after loan application by the buyer.
What is a loan estimate form?
A federal law that deals with procedures to be followed in certain types of real estate closings
What is RESPA?