CALIFORNIA REAL ESTATE EXAM BANK | ACCURATE REAL EXAM QUESTIONS AND
ANSWERS WITH RATIONALES AND A STUDY GUIDE | EXPERT VERIFIFED FOR
GUARANTEED PASS | LATEST UPDATE | ALL VERSIONS.
How are ownership rights and interest in real property established by way of a court
proceeding?
A - cloud on title
B - equitable use
C- quiet title action
D - quitclaim
Answer: C
Answer Feedback: A quiet title action is proceeding to establish an individual's right to
ownership of real property against one or more adverse claimants.
The recording of an instrument gives:
A - actual notice
B - passive notice
C - absolute notice
D - constructive notice
Answer: D.
Answer Feedback: Constructive notice is given by taking physical possession or by recording an
instrument.
,Federal income tax rates on ordinary income are:
A - progressive
B - equal
C - flat
D - digressive
Answer: A.
Answer Feedback: The more you make, the more you are taxed.
When title of a property is voluntary transferred without any money consideration, this would
be considered:
A - avulsion
B - eminent domain
C - a gift
D - foreclosure
Answer: C.
Answer Feedback: This describes a gift which is the only right choice of a voluntary transfer
without consideration (money).
Who would you contact if you feel your property has been over assessed by the county
assessor?
A - Local housing council
,B - Board of equalization
C - County tax collector
D - Assessment appeals board
Answer: D .
Answer Feedback: You would contact this department to plead your case.
A single family home that had an assessed value that was much lower than the current market
value was sold on November 3rd at its current market value. What will the new owners have to
pay?
A - supplement tax based on the difference between the old assessed value and the new
assessed value for the remaining fiscal year
B - nothing
C - a prorated amount of tax
D - a flat tax of 10%
Answer: A .
Answer Feedback: When a property is sold for more than the assessed value, the new buyer will
receive a supplemental tax bill based on the new assessed value.
An income property owner was figuring out their net income for tax purposes. They took the
gross income and deducted certain expenses. What cannot be deducted?
A - management expenses
, B - cost of a fence
C - interest for a loan
D - depreciation
Answer: B .
Answer Feedback: A fence is a capital improvement and cannot be deducted as an expense for
tax purposes.
When referring to a building bought for income purposes, the owner can deduct all of the
following for income tax purposes, except:
A - loss of rental due to vacancies
B - depreciation when the property value increases
C - interest payments on the second trust deed
D - cost of repairing the vacant units
Answer: A .
Answer Feedback: Vacancy losses cannot be deducted from income.
A sale leaseback purchaser would be least concerned about the:
A - depreciated value of the building
B - condition of the improvement
C - location of the property
D - creditworthiness of the tenant
Answer: A.
Answer Feedback: Depreciated value has to do with the adjusted costs basis of the building.
ANSWERS WITH RATIONALES AND A STUDY GUIDE | EXPERT VERIFIFED FOR
GUARANTEED PASS | LATEST UPDATE | ALL VERSIONS.
How are ownership rights and interest in real property established by way of a court
proceeding?
A - cloud on title
B - equitable use
C- quiet title action
D - quitclaim
Answer: C
Answer Feedback: A quiet title action is proceeding to establish an individual's right to
ownership of real property against one or more adverse claimants.
The recording of an instrument gives:
A - actual notice
B - passive notice
C - absolute notice
D - constructive notice
Answer: D.
Answer Feedback: Constructive notice is given by taking physical possession or by recording an
instrument.
,Federal income tax rates on ordinary income are:
A - progressive
B - equal
C - flat
D - digressive
Answer: A.
Answer Feedback: The more you make, the more you are taxed.
When title of a property is voluntary transferred without any money consideration, this would
be considered:
A - avulsion
B - eminent domain
C - a gift
D - foreclosure
Answer: C.
Answer Feedback: This describes a gift which is the only right choice of a voluntary transfer
without consideration (money).
Who would you contact if you feel your property has been over assessed by the county
assessor?
A - Local housing council
,B - Board of equalization
C - County tax collector
D - Assessment appeals board
Answer: D .
Answer Feedback: You would contact this department to plead your case.
A single family home that had an assessed value that was much lower than the current market
value was sold on November 3rd at its current market value. What will the new owners have to
pay?
A - supplement tax based on the difference between the old assessed value and the new
assessed value for the remaining fiscal year
B - nothing
C - a prorated amount of tax
D - a flat tax of 10%
Answer: A .
Answer Feedback: When a property is sold for more than the assessed value, the new buyer will
receive a supplemental tax bill based on the new assessed value.
An income property owner was figuring out their net income for tax purposes. They took the
gross income and deducted certain expenses. What cannot be deducted?
A - management expenses
, B - cost of a fence
C - interest for a loan
D - depreciation
Answer: B .
Answer Feedback: A fence is a capital improvement and cannot be deducted as an expense for
tax purposes.
When referring to a building bought for income purposes, the owner can deduct all of the
following for income tax purposes, except:
A - loss of rental due to vacancies
B - depreciation when the property value increases
C - interest payments on the second trust deed
D - cost of repairing the vacant units
Answer: A .
Answer Feedback: Vacancy losses cannot be deducted from income.
A sale leaseback purchaser would be least concerned about the:
A - depreciated value of the building
B - condition of the improvement
C - location of the property
D - creditworthiness of the tenant
Answer: A.
Answer Feedback: Depreciated value has to do with the adjusted costs basis of the building.
