Real Estate exam 3 questions with
correct answers.
Ch 17 ANS -
IRR is the ____ that will bring NPV of a series of CF to ___ ANS -discount rate
zero
CCIM ANS -Certified Commercial Investment Member
Pro Forma - Commercial Real Estate ANS -
Under a LLC form, _____ for property can reduce personal tax expense ANS -depreciation expense
The ____ form allows investors to avoid double taxation. ANS -General Partnership
What is the general partner's liability for debts? ANS -They're liable for all debts.
What kind of liability do S corporations have? ANS -Limited liability for shareholders
How are S corporations taxed? ANS -S corporations themselves are not taxed. The income is taxed to
the shareholders when earned by the S corporation.
What is the required number of shareholders S corporations can/must have? ANS -max of 100
What is the required number of shareholders REIT can/must have? ANS -Minimum of 100
How risky is Development & Construction Lending? ANS -Extremely
,The construction loan market is dominated by what financial entity? ANS -Commercial banks
What is the minimum investment in a Public Non-Listed REIT? ANS -$5,000
_____ allows "like-kind" tax-deferred exchanges ANS -Section 1031 of IRC
Section 1031 allows you to do what with capital gains tax? ANS -Defer capital gains tax
What are Qualified Opportunity Zones? ANS -They are areas the government will reward investors for
building in due to their low-income status.
Most new REITs have this form: ANS -Umbrella Partnership REIT
Rather than accounting "net income", ____ is usually used to express REIT-level cash flows ANS -Funds
From Operations
What are the top 5 attributes that have driven the growth of REITs in the USA? ANS -1. Diversification
2. Dividends
3. Transparency
4. Liquidity
5. Performance
Capital gains tax right now is at ___% ANS -20
Double taxation of the income produced by the underlying properties is most likely to occur if the
commercial properties are held in the form of a(n):
a) S corporation
b) Limited partnership
c) C corporation
, d) Real estate investment trust
e) Limited liability company ANS -C Corporation
With regard to double taxation, distributions, and the treatment of the losses, general partnerships are
most like:
a) S corporations
b) C corporations
c) Limited partnerships
d) Real estate investment trusts ANS -Limited partnerships
Special allocations of income or loss are available if the form of ownership is a:
a) S corporation
b) Real estate investment trust
c) Limited liability company
d) C corporation ANS -Limited Liability Company (LLC)
Small-to medium-sized real estate syndicates that develop or acquire property in a local market are
most typically organized as:
a) S corporations
b) C corporations
c) Limited liability companies
d) Real estate investment trusts ANS -Limited liability companies
A real estate investment trust generally:
a) Must have fewer than 100 shareholders
correct answers.
Ch 17 ANS -
IRR is the ____ that will bring NPV of a series of CF to ___ ANS -discount rate
zero
CCIM ANS -Certified Commercial Investment Member
Pro Forma - Commercial Real Estate ANS -
Under a LLC form, _____ for property can reduce personal tax expense ANS -depreciation expense
The ____ form allows investors to avoid double taxation. ANS -General Partnership
What is the general partner's liability for debts? ANS -They're liable for all debts.
What kind of liability do S corporations have? ANS -Limited liability for shareholders
How are S corporations taxed? ANS -S corporations themselves are not taxed. The income is taxed to
the shareholders when earned by the S corporation.
What is the required number of shareholders S corporations can/must have? ANS -max of 100
What is the required number of shareholders REIT can/must have? ANS -Minimum of 100
How risky is Development & Construction Lending? ANS -Extremely
,The construction loan market is dominated by what financial entity? ANS -Commercial banks
What is the minimum investment in a Public Non-Listed REIT? ANS -$5,000
_____ allows "like-kind" tax-deferred exchanges ANS -Section 1031 of IRC
Section 1031 allows you to do what with capital gains tax? ANS -Defer capital gains tax
What are Qualified Opportunity Zones? ANS -They are areas the government will reward investors for
building in due to their low-income status.
Most new REITs have this form: ANS -Umbrella Partnership REIT
Rather than accounting "net income", ____ is usually used to express REIT-level cash flows ANS -Funds
From Operations
What are the top 5 attributes that have driven the growth of REITs in the USA? ANS -1. Diversification
2. Dividends
3. Transparency
4. Liquidity
5. Performance
Capital gains tax right now is at ___% ANS -20
Double taxation of the income produced by the underlying properties is most likely to occur if the
commercial properties are held in the form of a(n):
a) S corporation
b) Limited partnership
c) C corporation
, d) Real estate investment trust
e) Limited liability company ANS -C Corporation
With regard to double taxation, distributions, and the treatment of the losses, general partnerships are
most like:
a) S corporations
b) C corporations
c) Limited partnerships
d) Real estate investment trusts ANS -Limited partnerships
Special allocations of income or loss are available if the form of ownership is a:
a) S corporation
b) Real estate investment trust
c) Limited liability company
d) C corporation ANS -Limited Liability Company (LLC)
Small-to medium-sized real estate syndicates that develop or acquire property in a local market are
most typically organized as:
a) S corporations
b) C corporations
c) Limited liability companies
d) Real estate investment trusts ANS -Limited liability companies
A real estate investment trust generally:
a) Must have fewer than 100 shareholders
