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Exam 16: Real Estate and High-Risk Investments

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Question 21

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Jodi has a duplex with operating income of $6,000 before depreciation.If the duplex cost $150,000 including $40,000 land value,how much is Jodi's taxable income after depreciation?​

A) ​$0
B) ​$2,000
C) ​$3,180
D) ​$6,000.

E) A) and B)
F) A) and C)

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Question 22

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A crude rate of return is a rough measure of the yield on amounts invested that assumes that equal portions of the gain are earned each year.

A) True
B) False

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Question 23

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If you put money into collectibles,limit your investment to no more than 20 percent of your portfolio.

The amount of cash flow in income-producing real estate investments depends on​

A speculator is someone who buys an asset in the hope that someone else will pay more for it in the near future.

Timesharing should be considered vacation plans rather than real estate investments.

Hedge funds are limited to "accredited investors and purchasers" who have incomes over $1 million.

Failing to factor in income lost due to vacancies and collection costs for tenants who do not pay is a mistake that real estate investors may make.

____ would not be included in a list of high-risk investments.

The IRS allows interest and real estate tax deductions on a second home.

A primary advantage of real estate investing is liquidity.

Alberto bought commercial property in 1980 for $50,000.In 2011,he traded it for similar property valued at $150,000 and received $10,000 in cash.His taxable income from this transaction in 2014 would be​

Which of the following is not correct about collectibles?​

Investment in real estate generally requires many thousands of dollars,often with an initial outlay of $15,000 or more.

An option is a contract that All of these.

Deeded timesharing provides buyers with actual titles and deeds to limited time periods of use of real estate.

Scams and frauds abound with collectibles as investments.

Using borrowed funds to increase the rate of return on an investment is called leverage. ​

Juan traded a rental house he had purchased for $100,000 six years ago to Randy for a rental house worth $125,000.Juan will have to pay taxes this year on $25,000 capital gain. ​

Painting a rental property is an example of a repair.