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1

Sam's house is worth $300,000. Assessment is 48%. Tax is 5%. What is annual tax?

$7200.

$Value x %assessment x percent tax= $annual tax
300k x 48%= 40k
40k x 5%= 7200

2

What is an assessment?

Adjustment to lower tax for high market values

3

Sam's house is worth $200,000. Assessment is 50%. Tax is $5 per $100 of value. What is semi annual tax?

$2500.

$5 per $100= 5%.

$200k x 50% = $100k
100k x 5%= $5000
semi annual=2500

4

What is the reason for a 1031 exchange?

A tax break or tax shelter

5

What is another name for a tax break?

tax shelter

6

What is boot?

personal property or money

7

What property is like-kind to a hotel?

ALL real estate

8

What does a qualified intermediary do?

Holds money in a RE exchange

9

Does a RE exchange have to be in the US?

Yes

10

What are the bundle of rights?

Possession
Quiet Enjoyment
Exclusion
Disposition
Control

11

What rights are freehold?

Possession
Quiet Enjoyment
Exclusion
Control
Dispostion

12

What rights are leasehold?

Possession
Quiet Enjoyment
Exclusion

13

What right do you have in a leasehold?
a) encroachment
b) escheat
c) easement
d) exclusion

d) Exclusion

encroachment= trespass by a thing
escheat= die, no will, no heirs = NYS takes RE
easement= someone can legally use your RE (can't drive or walk on RE)

14

Unless it is a lesser estate, what kind of freehold is it?
a) Fee Simple Absolute
b) Life Estate
c) Estate for Years
d) Estate at Will

A) Fee Simple

life estate= lesser estate
estate for years= leasehold
estate at will= leasehold

15

What is a primary example of a full estate with full bundle of rights?

fee simple absolute

16

What is an example of a lesser freehold where you only own RE for your lifetime and then it goes on to someone else? And what 2 bundles of rights are lacking?

Life Estate: Have Deed but lack Control + Disposition

17

What are two acronyms for the bundle of rights?

Please Quit Eating Candy Daily

DEEPC

18

Which department licenses mortgage professionals?

Department of Financial Services (DFS)

19

Which department licenses REA?

Department of State

20

What was the former name for the Department of Financial Services and who do they often license?

Dept of Banking

Mortgage Brokers

21

What state dept is in charge of drinking water and sewage?

Dept of Health

22

What fed govt protects wetlands?

Army Corps of Engineers

23

What do the Army Corps of Engineers protect?

Wetlands

24

What are 2 things the dept of health is in charge of?

drinking water & sewage

25

What is it called when you take a number and divide it up into smaller pieces?

Proration

26

Sam sells his house April 30. He already paid this year's RE tax of $2400 in full. Under proration, who owes what to whom?

$1600; debit to buyer

Buyer owes Sam for 8 months
Debit to buyer; Credit to Sam

$2400 / 12 months = $200
$200 x 8 months= $1600

27

What is the difference between debit and credit?

debit= you owe
credit= get paid

28

When calculating proration how many days are in a month?

30

29

A seller wants to net $180,000 on sale of his house after 10% commission's paid. What does sale price have to be?

$200,000.

$ Net price / % to seller = $ Sale price

100%-10% commission= 90%

180k/ 90%=$200k

Memorize:
Think 8= 2 o's= 200k
10% of 18= $2 tip = 200k

30

How do you calculate sale price?

Net price** / percent to seller* = sale price

*usually given percent to REA and need to determine percent to seller

**sometimes need to add closing costs + mortgage before dividing percent to seller