IAAO 102 COMPREHENSIVE EXAM SCRIPT
2026 QUESTIONS WITH SOLUTIONS
◉ income divided by rate equals value I ÷ R = V. Answer: the basic
equation used in the income approach to value
◉ Income approach to value. Answer: -based on the principle of
anticipation
-translates the ability of property to generate income into an
indication of value
-requires an estimate of net operating income of property
◉ Value. Answer: is created by the anticipation of future benefits
◉ capitalization. Answer: is the process used to convert income into
and estimate of value
◉ fixed-rate mortgage. Answer: a loan secured by real property
featuring an interest rate that is constant for the term of the loan
◉ leasehold income. Answer: leasehold incomeFrom the tenant's
standpoint, when economic rent exceeds contract rent the difference
, ◉ Market rent. Answer: The rental income that a property would
most probably command in the open market
◉ depreciation. Answer: NOT an allowable expense from the
appraiser's point of view:
◉ Why does an appraiser prepare a reconstructed operating
statement when using the income approach?. Answer: to develop an
estimated projection of expected income and expense that will
reflect the earning capacity of the property
◉ effective gross income. Answer: The anticipated income from all
operations of the property adjusted for vacancy and collection
losses, and miscellaneous income
◉ pre-tax cash flow. Answer: Net operating income minus debt
service equals
◉ potential gross income. Answer: An allowance for vacancy and
collection loss is usually estimated as a percentage of
◉ income tax expense. Answer: when calculating net operating
income, what expense is NOT a proper deduction from gross
income?
2026 QUESTIONS WITH SOLUTIONS
◉ income divided by rate equals value I ÷ R = V. Answer: the basic
equation used in the income approach to value
◉ Income approach to value. Answer: -based on the principle of
anticipation
-translates the ability of property to generate income into an
indication of value
-requires an estimate of net operating income of property
◉ Value. Answer: is created by the anticipation of future benefits
◉ capitalization. Answer: is the process used to convert income into
and estimate of value
◉ fixed-rate mortgage. Answer: a loan secured by real property
featuring an interest rate that is constant for the term of the loan
◉ leasehold income. Answer: leasehold incomeFrom the tenant's
standpoint, when economic rent exceeds contract rent the difference
, ◉ Market rent. Answer: The rental income that a property would
most probably command in the open market
◉ depreciation. Answer: NOT an allowable expense from the
appraiser's point of view:
◉ Why does an appraiser prepare a reconstructed operating
statement when using the income approach?. Answer: to develop an
estimated projection of expected income and expense that will
reflect the earning capacity of the property
◉ effective gross income. Answer: The anticipated income from all
operations of the property adjusted for vacancy and collection
losses, and miscellaneous income
◉ pre-tax cash flow. Answer: Net operating income minus debt
service equals
◉ potential gross income. Answer: An allowance for vacancy and
collection loss is usually estimated as a percentage of
◉ income tax expense. Answer: when calculating net operating
income, what expense is NOT a proper deduction from gross
income?
