FSU REE4204 EXAM 3 SIRMANS QUESTIONS WITH CERTIFIED ANSWERS – UPDATED!!
The following will negatively affect real estate as a tax shelter:
a. extension of the depreciation period
b. introduction of a lower rate on capital gains
c. elimination of passive loss limitation
d. all of the above
...
FSU REE4204 EXAM 3 SIRMANS
QUESTIONS WITH CERTIFIED
ANSWERS – UPDATED!!
The following will negatively affect real estate as a tax shelter:
a. extension of the depreciation period
b. introduction of a lower rate on capital gains
c. elimination of passive loss limitation
d. all of the above
e. none of the above - Answer-A
The following tax law has an effect on the value of real estate:
a. capital gains treatment
b. length of depreciation for real property
c. passive loss limitation
d. all of above
e. none of above - Answer-D
Presently the tax laws that favor investment in real estate include those related to:
a. passive loss limitation
b. depreciation write-off
c. low income housing
d. capital gains - Answer-C
Positive Leverage - Answer-cost of debt < ROA
Negative Leverage - Answer-cost of debt > ROA
Total cash flows of a property (2) - Answer-1. Operating CF (rental rev, etc...)
2. CF from Resale of the property
Tax Shelters - Answer-A tax shelter is an investment whose value is enhanced by tax
rules and regulations.
Creates value that might otherwise had not been there
Depreciation is defined as a but not a cash outlay.
a. cash expense
b. tax deductible expense
c. production cost
, d. part of your cash flow
e. none of the above - Answer-B
Residential income property is depreciated over:
a. 15 years
b . 3 0 years
c. 39 years
d. 27.5 years
e. 20 years - Answer-D
Tax law changes that would affect the value of real estate include:
a. changes in marginal rates (bracket rates)
b. changes in depreciation allowance
c. changes in capital gains rates
d. all of the above - Answer-D
Factors that affect the value of tax savings from depreciation include:
a. amount of depreciation
b. acceleration of depreciation
c. the marginal tax rate
d. all of the above - Answer-D
The Tax Act of 1993 raised the marginal tax rates on ordinary income to:
a. 28%
b. 39.6%
c. 51.8%
d. 42.5% - Answer-B
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