Real Estate Exam Federal Law Practice Test 2025 Question Answers

1) A homeowner, on his or her federal income tax return, may not deduct:

2) Which amendment to the Constitution provides support by banning racial discrimination?

3) Federal income tax deductions for a principal residence include:

4) The initial cost of an asset, increased by capital expenditures and reduced by depreciation expenses, from which gain or loss is measured is:

5) A REIT is like:

6) A tax deduction for business property that requires no cash outlay is:

7) Cash or other unlike property included to equalize values in a Section 1031 exchange is called:

8) The 1968 Fair Housing Act, as amended, prohibits housing discrimination on the basis of:

9) A broker has contacted owners in a certain subdivision and advised them that several members of a particular race have bought homes in the area. The broker has offered to list properties at a reduced rate and encouraged the owners to sell quickly. This is:

10) Broker Bob is showing houses to Joe Chen, who is of Chinese ancestry. Bob shows Joe houses in a neighborhood of predominantly Chinese-American residents because Bob thinks Joe would feel more at home there. This is:

11) The initial cost of an asset, increased by capital expenditures and reduced by depreciation expenses, from which gain or loss is measured is:

12) The report of a sale to the IRS is normally made on Form 1099 by the:

13) The two most important income tax deductions for homeowners are:

14) Federal income tax rates are generally:

15) A homeowner, on their federal income tax return, may not deduct:

16) Sullivan wants to rent an apartment but is confined to a wheelchair. At Sullivan’s request, the landlord must:

17) Depreciation claimed for income tax purposes:

18) Under Internal Revenue Code Section 1031, tax on the profit of an exchange is:

19) Instead of selling business or investment property and paying a tax on the gain, one may prefer:

20) The federal income tax exemption on the gain from the sale of a personal residence held long enough by a married couple is up to:

21) Broker Barb is acting as a buyer’s agent for Joe. Joe asks whether any people of a certain race live in a specific neighborhood. How should Barb respond?

22) To qualify as a Section 1031 exchange, the property must be:

23) No federal fair housing laws are violated if a landlord refuses to rent to:

24) The two most important income tax deductions for homeowners are:

25) A seller asks his broker about the race of a potential buyer. The broker:

26) The federal income tax exemption on the gain from the sale of a personal residence held long enough by a married couple is up to:

27) Owners of improved rental property can generally deduct on their federal income tax returns in the year incurred:

28) The federal income tax exemption on the gain from the sale of a personal residence held long enough by a single individual is up to:

29) Indications of independent contractor status include:

30) If a landlord refuses to rent to a minority prospective tenant with a poor credit record:

31) Court action may be taken by an individual under the Fair Housing Act:

32) Federal income tax rates are generally:

33) The federal income tax exemption on the gain from the sale of a personal residence held long enough by a single individual is up to:

34) Cash or other unlike property included to equalize values in a Section 1031 exchange is called:

35) Harold bought 20 acres for $125,000 and sold the land three years later for $230,000. On his income tax return, he reports:

36) Taxable gain on the sale of commercial real estate is calculated by:

37) Federal income tax deductions for a principal residence include:

38) The Civil Rights Act of 1968 prohibits:

39) In a Subchapter S corporation, the corporation itself:

40) A Real Estate Investment Trust (REIT) must:

41) When a salesperson’s agreement with a broker is to be an independent contractor, the broker:

42) “Familial status” refers to:

43) Ellen owns a two-family house and lives in one side. She wants to advertise the other side as nonsmoking. Can she legally do so?

44) Mr. and Mrs. Martin jointly bought a principal residence in 2004 for $325,000 and sold it in 2016 for $500,000. What portion of their $175,000 gain is subject to capital gains tax?

45) Where the dominant population base of an area consists of minorities:

46) Double taxation is generally not avoided when using which form of ownership?

47) In the purchase of a home, which is frequently tax-deductible?

48) A tax deduction for business property that requires no cash outlay is:

49) A Real Estate Investment Trust (REIT) must:

50) Which of the following is exempt from the federal Fair Housing Act of 1968?