Test Bank for Real Estate Principles
Final Guide Ch. 15-21(4th Edition by
Valerie D. Thompson)
Chapter 15: - ANS
Property taxes - ANSare ad valorem (taxes charged according to the value of the property); the
more valuable the property, the higher the tax.
Step 1: local budget preparation and appropriation
Step 2: appraisal of all taxable property within the taxation district
Step 3: allocate of the amount to be collected among the taxable properties in the district
Appropriation process - ANStaxing bodies create budgets along with a list of sources from
which the money will be derived, is enacted into law
Appraises - ANSa county or state that assesses each taxable parcel of land
Assessed value - ANSa value placed on a property for the purpose of taxation
Mill rate - ANSproperty tax rate expressed in tenths of a cent per dollar of assessed valuation
Tax lien - ANSa charge or hold by the government against property to ensure the payment of
taxes
Tax certificate - ANSa document issued at a tax sale that entitles the purchaser to a deed at a
later date if the property is not redeemed
Assessment Appeal Board - ANSlocal government body that hears and rules on property owner
complaints of over assessment.
Assessment rolls - ANSThe assed values of all lands and buildings are made for available for
public inspection.
Unpaid Property Taxes - ANS3 consecutive years unpaid
-1200 in taxes
-8% to the firm who paid your taxes.
-$500 fee
, Board of Equalization - ANSPerforms another assessment related task that of equalizing
assessment procedures between counties.
Property Tax Exemption - ANSLakes, parks, wounded veteran, non profit, cemetery, religious
institutions, government owned utilities, hospitals, rural areas, large tracks of land are exempt
from taxation.
Homestead Exemption - ANS
Variations - ANSProperty taxes vary by county/district schools.
Special Assessments aka impact fee - ANSImprovements made that will benefit property
owners in benefited area. Ex. Paving a street
Are a lien against the property.
Improvement/Assessment District - ANSArea receiving benefit of improvement and property
within that district bares the cost of improvement
Public Improvement - ANSReconstruction of city sewage plant, benefits general public, financed
through ad valorem property tax
Federal Income Tax - ANSBasis is price originally paid for home plus any fees paid for closing
and improvements.
-Repairs - Increased basis
Capital Gains - ANSSale Price - Selling Expenses; Then subtract basis to determine the gain.
-15% spurs transactions to take place
-Buying and holding
-Hold atlas 1 yr.
24% now
Flipping - ANSIncome Tax
Buying and holding - ANSGain Tax
Income Tax Exclusion - ANSSale of price residence; use for 2 years, then sell before 5.
250K single - 500K married
Deductions - ANSInterest is a deduction.
Go to Bond - ANSIf assessment is large, owner can pay in full or let it go to bond.
Final Guide Ch. 15-21(4th Edition by
Valerie D. Thompson)
Chapter 15: - ANS
Property taxes - ANSare ad valorem (taxes charged according to the value of the property); the
more valuable the property, the higher the tax.
Step 1: local budget preparation and appropriation
Step 2: appraisal of all taxable property within the taxation district
Step 3: allocate of the amount to be collected among the taxable properties in the district
Appropriation process - ANStaxing bodies create budgets along with a list of sources from
which the money will be derived, is enacted into law
Appraises - ANSa county or state that assesses each taxable parcel of land
Assessed value - ANSa value placed on a property for the purpose of taxation
Mill rate - ANSproperty tax rate expressed in tenths of a cent per dollar of assessed valuation
Tax lien - ANSa charge or hold by the government against property to ensure the payment of
taxes
Tax certificate - ANSa document issued at a tax sale that entitles the purchaser to a deed at a
later date if the property is not redeemed
Assessment Appeal Board - ANSlocal government body that hears and rules on property owner
complaints of over assessment.
Assessment rolls - ANSThe assed values of all lands and buildings are made for available for
public inspection.
Unpaid Property Taxes - ANS3 consecutive years unpaid
-1200 in taxes
-8% to the firm who paid your taxes.
-$500 fee
, Board of Equalization - ANSPerforms another assessment related task that of equalizing
assessment procedures between counties.
Property Tax Exemption - ANSLakes, parks, wounded veteran, non profit, cemetery, religious
institutions, government owned utilities, hospitals, rural areas, large tracks of land are exempt
from taxation.
Homestead Exemption - ANS
Variations - ANSProperty taxes vary by county/district schools.
Special Assessments aka impact fee - ANSImprovements made that will benefit property
owners in benefited area. Ex. Paving a street
Are a lien against the property.
Improvement/Assessment District - ANSArea receiving benefit of improvement and property
within that district bares the cost of improvement
Public Improvement - ANSReconstruction of city sewage plant, benefits general public, financed
through ad valorem property tax
Federal Income Tax - ANSBasis is price originally paid for home plus any fees paid for closing
and improvements.
-Repairs - Increased basis
Capital Gains - ANSSale Price - Selling Expenses; Then subtract basis to determine the gain.
-15% spurs transactions to take place
-Buying and holding
-Hold atlas 1 yr.
24% now
Flipping - ANSIncome Tax
Buying and holding - ANSGain Tax
Income Tax Exclusion - ANSSale of price residence; use for 2 years, then sell before 5.
250K single - 500K married
Deductions - ANSInterest is a deduction.
Go to Bond - ANSIf assessment is large, owner can pay in full or let it go to bond.
