Real Estate Exam Federal Law Practice Test 2025 Question Answers

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

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

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

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

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

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

7) 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:

8) 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:

9) Depreciation claimed for income tax purposes:

10) 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?

11) Federal income tax rates are generally:

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

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

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

15) A REIT is like:

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

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

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

19) 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:

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

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

22) “Familial status” refers to:

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

24) Indications of independent contractor status include:

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

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

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

28) 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:

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

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

31) 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:

32) Federal income tax rates are generally:

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

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

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

36) 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:

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

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

39) The Civil Rights Act of 1968 prohibits:

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

41) 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?

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

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

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

45) 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?

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

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

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

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

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