Real Estate Exam Federal Law Practice Test 2026 Question Answers

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

2) 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:

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

4) Federal income tax rates are generally:

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

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

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

8) Depreciation claimed for income tax purposes:

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

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

11) 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?

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

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

14) A REIT is like:

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

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

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

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

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

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

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

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

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

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

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

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

27) 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?

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

29) The Civil Rights Act of 1968 prohibits:

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

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

32) 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:

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

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

35) Indications of independent contractor status include:

36) 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:

37) Federal income tax rates are generally:

38) 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:

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

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

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

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

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) Federal income tax deductions for a principal residence include:

45) 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:

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

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

48) “Familial status” refers to:

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

50) 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: