CTC Real Estate Tax Strategies

Question 1

Under IRC Section 1031, what type of property exchange allows a taxpayer to defer capital gains tax?

Accepted Answer

Like-kind exchange of investment or business property

Answer

Exchange of personal-use property for investment property

Answer

Sale and reinvestment of any real estate within 60 days

Answer

Exchange of a primary residence for a rental property

Question 2

What is the straight-line depreciation recovery period for residential rental property under MACRS?

Accepted Answer

27.5 years

Answer

39 years

Answer

25 years

Answer

31.5 years

Question 3

Under the passive activity loss rules of IRC Section 469, what is the maximum rental real estate loss a taxpayer may deduct annually if AGI does not exceed $100,000?

Accepted Answer

$25,000

Answer

$50,000

Answer

$10,000

Answer

$15,000

Question 4

What is the annual depreciation period for commercial (nonresidential) real property under MACRS?

Accepted Answer

39 years

Answer

27.5 years

Answer

40 years

Answer

31.5 years

Question 5

To qualify as a 'real estate professional' under IRC Section 469(c)(7) and avoid passive loss limitations, how many hours per year must a taxpayer spend in real property trades or businesses?

Accepted Answer

More than 750 hours

Answer

More than 500 hours

Answer

More than 1,000 hours

Answer

More than 1,500 hours

Question 6

What rate does the Net Investment Income Tax (NIIT) impose on passive rental income for high-income taxpayers?

Accepted Answer

3.8%

Answer

2.9%

Answer

5.0%

Answer

1.45%

Question 7

Which tax strategy involves reclassifying a building's components into shorter depreciation lives to accelerate deductions?

Accepted Answer

Cost segregation study

Answer

Bonus depreciation election

Answer

Section 179 expensing

Answer

Accelerated MACRS method