Real Estate Investing Real Estate Taxation 2

Question 1

What is the maximum amount of capital gains a married couple filing jointly can exclude from the sale of their primary residence under Section 121?

Accepted Answer

$500,000

Answer

$250,000

Answer

$750,000

Answer

$1,000,000

Question 2

In a 1031 exchange, what happens if an investor receives 'boot'?

Accepted Answer

Boot is taxable to the extent of gain realized

Answer

The entire exchange is disqualified

Answer

Boot is tax-free

Answer

Boot reduces the replacement property's basis

Question 3

Which depreciation method is required by the IRS for residential rental property placed in service after 1986?

Accepted Answer

Straight-line over 27.5 years

Answer

150% declining balance over 27.5 years

Answer

Straight-line over 39 years

Answer

200% declining balance over 27.5 years

Question 4

What is a 'qualified opportunity zone' investment's primary tax benefit for investors who hold for at least 10 years?

Accepted Answer

Permanent exclusion of gains on the QOZ investment itself

Answer

Deduction of 100% of the investment in year one

Answer

No property taxes on the investment

Answer

Double depreciation deductions

Question 5

Under the passive activity loss rules, which type of real estate investor can deduct up to $25,000 in rental losses against ordinary income?

Accepted Answer

Active participants with adjusted gross income below $100,000

Answer

Any investor who owns at least one rental property

Answer

Only real estate professionals

Answer

Investors with at least 10 rental units

Question 6

What is 'cost segregation' used for in real estate taxation?

Accepted Answer

Accelerating depreciation by reclassifying components to shorter recovery periods

Answer

Separating deductible repairs from capital improvements

Answer

Allocating purchase price between land and building

Answer

Tracking depreciation recapture amounts

Question 7

When an investor sells a rental property for a gain, the portion attributable to previously claimed depreciation is taxed at what maximum federal rate?

Accepted Answer

25%

Answer

15%

Answer

20%

Answer

37%