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REE 3043 - Woodyard FSU - Exam 2 (1). $7.99   Add to cart

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REE 3043 - Woodyard FSU - Exam 2 (1).

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REE 3043 - Woodyard FSU - Exam 2 (1).

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  • July 19, 2024
  • 9
  • 2023/2024
  • Exam (elaborations)
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REE 3043 - Woodyard FSU - Exam 2
Active income - ANS-income earned from salary wages, commissions, fees, and bonuses

After-tax cash flows - ANS-the residual claim on the property's cash flows after the federal
government has collected its share

Capital asset - ANS-an asset held for investment purposes

Cost recovery period - ANS-the period of time over which an asset is depreciated for tax
purposes

Dealer property - ANS-real estate held for sale to others

Deep tax shelter - ANS-negative taxable income from operations

Deferral benefits - ANS-the gain from delaying the payment of taxes until the property is sold

Depreciable basis - ANS-generally, the value of the acquired property (aka original cost basis)
less the value of the land

Investment activity - ANS-actions taken to maximize the production of future income

Investment property - ANS-real estate held as an investment for an investment for the
production of income

Original cost basis - ANS-total costs paid to acquire the property including land, building, and
acquisition expenses

Partial tax shelter - ANS-taxable income from operations less than before-tax cash flow

Passive income - ANS-income generated from trade and business activities in which the
taxpayer does not "materially" participate or generated from certain rental activities such as
rental real estate

Personal property - ANS-items such as furniture and fixtures which are often purchased in
conjunction with real property acquisitions

Personal residence - ANS-an owner-occupied housing unit

Portfolio income - ANS-income from investments in securities

, Replacement reserves - ANS-money set aside each year to accumulate a fund for the eventual
replacement of personal property

Standard deduction - ANS-the amount of deductible expenses, specified by Congress, that a
taxpayer may claim in lieu of itemizing allowable personal expenditures

Substantial improvements - ANS-major alterations to a property made in the years after
purchase, these improvements are treated as a separate building for tax purposes

Tax depreciation - ANS-the reduction in taxable income intended to reflect the wear and tear
that income properties experience over time

Trade or business property - ANS-real estate held for use in a trade or business, includes most
income producing property

C corporation - ANS-corporate ownership structure which provides limited liability, but suffers
from double taxation and does not enable losses to flow through to investors for current use

Commingled real estate funds - ANS-a collection of resources from various pension funds which
are pooled to purchase properties

Equity REITs - ANS-real estate investment trusts which invest in and operate income producing
properties

Funds from operations - ANS-net (accounting) income, plus tax depreciation, plus amortization
of leasing commissions and tenant improvements

General partnership - ANS-an ownership from characterized by multiple owners, unlimited
liability for each equity holder, and flow through taxation of both income and losses

Hybrid REITs - ANS-real estate investment trusts which invest in both properties and mortgages

Joint ventures - ANS-a business partnership formed between a lender and a developer or
investor to develop or purchase a specific property or properties

Limited liability company - ANS-a hybrid form of ownership that combines the corporate
characteristics of limited liability with the tax characteristics of a partnership

Limited partnership - ANS-a partnership in which one party assumes unlimited liability in
exchange for control of all material decision making, while all parties benefit from flow through
income and taxation

Mortgage REITs - ANS-real estate investment trusts which purchase mortgage obligations and
effectively become real estate lenders

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