| Read 'Chapter 1: Introduction' & answer the following question(s): |
| 1. | The tax system in the United States is based on taxing increases in wealth as opposed to taxing income. |
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| 2. | Forgiveness of debt is not taxable. |
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| 3. | The following creates taxable gains on the disposition of property: |
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| 4. | In the author's opinion, taxable gains are good because the alternative is sure to be less desirable. |
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| Read 'Chapter 2: What Are Your Objectives?' & answer the following question(s): |
| 5. | The four goals of investment or reinvestment are: |
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| Read 'Chapter 3: How to Estimate Your Capital Gains Taxes' & answer the following question(s): |
| 6. | How do capital improvements affect the adjusted basis of a property? |
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| 7. | A component of capital gain on a property is: |
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| 8. | The 1997 tax change which reduced the capital gains rate from 28% to 20% only reduced the rate of recapture of depreciation to 25%. |
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| Read 'Chapter 4: Benefiting from a Stepped-Up Basis' & answer the following question(s): |
| 9. | When one joint tenant dies in a joint tenancy, his ownership interest: |
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| 10. | Community property vesting allows the surviving spouse to receive a full stepped-up basis on both the deceased spouse's share and on the surviving spouse's own share. |
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| 11. | Obtaining the highest possible value for stepped-up basis is always to your advantage. |
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| Read 'Chapter 5: Using the Primary Residence Exclusion' & answer the following question(s): |
| 12. | To qualify for the primary residence exclusion, you must pass: |
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| 13. | The general rule to pass the primary residence exclusion 'use test' is that the owner must have lived in the home for at least two contiguous years. |
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| 14. | Depreciation taken as a home office deduction will have to be recaptured and taxed when the home is sold. |
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| Read 'Chapter 6: Starker 1031 Tax-Deferred Exchanges' & answer the following question(s): |
| 15. | 1031 Exchanges allow taxpayers to change the type or character of real estate investments. |
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| 16. | The party which facilitates and documents 1031 exchanges and holds funds between the sale of a relinquished property and the purchase of a replacement property is known as a(n): |
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| 17. | Trading up means: |
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| 18. | The adjusted basis of relinquished property in a 1031 exchange will transfer to the replacement property. |
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| 19. | The basic requirements for a fully tax-deferred 1031 exchange include: |
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| 20. | In a 1031 exchange where the mortgage on the replacement property is less than the mortgage on the relinquished property, the difference in the mortgage amount is called: |
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| 21. | The proper time to arrange with an accommodator for a 1031 exchange is: |
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| 22. | A qualified intermediary creates a 'safe harbor' - that is a legal presumption that there was no actual or constructive receipt of funds. |
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| 23. | Government licensing requirements for accommodators are: |
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| 24. | Replacement property identified 46 days after the closing and transfer of relinquished property may qualify for a deferred 1031 exchange. |
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| 25. | Notifying your title company by telephone that you've identified a replacement property satisfies the 45 day identification rule. |
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| 26. | A common arrangement for reverse exchanges where a friendly party purchases and holds replacement property until such time as the relinquished property is sold is known as: |
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| 27. | A QEAA is a: |
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| Read 'Chapter 7: Installment Sales' & answer the following question(s): |
| 28. | In balancing the risks and benefits of installment sales, you should: |
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| 29. | Too high of an interest rate on an installment sale may cause the buyer to refinance sooner which may trigger immediate capital gains tax. |
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| Read 'Chapter 8: Combining a 1031 Exchange with an Installment Sale' & answer the following question(s): |
| 30. | One of the main reasons for using the combination 1031 exchange with an installment sale is to reduce the level of real estate investments as a whole. |
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| Read 'Chapter 9: Private Annuity Trusts' & answer the following question(s): |
| 31. | Unlike an installment sale, when appreciated realty is exchanged for a private annuity contract, capital gains are triggered. |
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| 32. | The trustee of a private annuity trust is responsible for: |
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| 33. | The requirement that a private annuity trust be unsecured may be discomforting to a property owner as they lose control of the asset. |
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| Read 'Chapter 10: Charitable Remainder Trusts' & answer the following question(s): |
| 34. | With a charitable remainder trust, you are able to take a charitable gift income tax deduction to offset your immediate income tax liability subject to certain limitations. |
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| 35. | A charitable remainder trust is fairly simple to change or cancel once it's been set up. |
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| 36. | The trustee of a charitable remainder trust may not be: |
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| 37. | A wealth replacement trust is a trust designed to purchase and continue paying premiums on a life insurance policy that will pay a set amount on the death of the donor. |
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| Read 'Chapter 11: Tax-Free Real Estate Investing in an IRA' & answer the following question(s): |
| 38. | Self directed IRAs are illegal. |
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| 39. | Prohibited transactions of a self directed IRA include: |
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| 40. | Income from debt-financed property is considered Unrelated Business Income (UBI). |
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