Chapter 14 Quiz: Income Tax and Investment

Which of the following is deductible for tax purposes resulting from home ownership?

Which of the following is deductible for tax purposes resulting from home ownership?

The Taxpayer Relief Act of 1997 allows a capital gains exclusion on the sale of a principal residence provided:

The Taxpayer Relief Act of 1997 allows a capital gains exclusion on the sale of a principal residence provided:

A discount point paid by a borrower or seller to obtain a conventional mortgage loan to purchase a principal residence is calculated on:

Discount points paid by a borrower or seller to obtain a conventional mortgage loan to purchase a principal residence:

With regard to a real estate commission paid by a seller, which of the following statements is correct?

With regard to a real estate commission paid by a seller, which of the following statements is correct?

A person may depreciate property for tax purposes when the property is:

A person may depreciate property for tax purposes when the property is:

The maximum exclusion for capital gains on a primary residence is:

The maximum exclusion for capital gains on a primary residence is:

Which of the following can’t be depreciated?

Which of the following can’t be depreciated?

Which of the following is a benefit that depreciation provides?

Which of the following is a benefit that depreciation provides?

Deductible expenses for a business property include all of the following EXCEPT:

Deductible expenses for a business property include all of the following EXCEPT:

Raul Ramirez and Sarah Gildar trade office buildings. In the trade, Raul receives $20,000 in cash in addition to Sarah’s office building. With regard to this transaction, which of the following statements is correct?

Raul Ramirez and Sarah Gildar trade office buildings. In the trade, Raul receives $20,000 in cash in addition to Sarah’s office building. With regard to this transaction, which of the following statements is correct?

The basis of property received in a tax-free exchange is:

The basis of property received in a tax-free exchange is:

In 2014, Ed and Margaret take advantage of the low interest rates to refinance their existing 30-year, 9.5 percent mortgage with a 15-year, 6 percent mortgage on their present home. They pay $1,500 in discount points to refinance this loan. How will the cost of these points be treated on their income tax?

In 2014, Ed and Margaret take advantage of the low interest rates to refinance their existing 30-year, 9.5 percent mortgage with a 15-year, 6 percent mortgage on their present home. They pay $1,500 in discount points to refinance this loan. How will the cost of these points be treated on their income tax?

First-time home buyers may withdraw up to $10,000 from a retirement plan without penalty provided the money is used to purchase a home. A first-time homebuyer, under these circumstances, is defined as:

First-time home buyers may withdraw up to $10,000 from a retirement plan without penalty provided the money is used to purchase a home. A first-time homebuyer, under these circumstances, is best defined as:

Victor and Valerie own a vacation property at the beach, which they use only one week per year. The property is rented out at fair market value for the rest of the year. Which items of this property can they deduct?

Victor and Valerie own a vacation property at the beach, which they use only one week per year. The property is rented out at fair market value for the rest of the year. Which items of this property can they deduct?

An investor says that her rate of return is 12.5 percent after selling a rental property. This means:

An investor says that her rate of return is 12.5 percent after selling a rental property. This means: