Real Estate Exam Federal Law Practice Test 2025 Question Answers

1) 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:

2) 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?

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

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

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

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

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

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

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

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

11) Federal income tax rates are generally:

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

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

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

15) 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?

16) 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:

17) A REIT is like:

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

19) The Civil Rights Act of 1968 prohibits:

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

21) “Familial status” refers to:

22) 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:

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

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

25) 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:

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

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

28) Depreciation claimed for income tax purposes:

29) Indications of independent contractor status include:

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

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

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

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

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

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

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

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

38) 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:

39) 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?

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

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

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

43) 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:

44) Federal income tax rates are generally:

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

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

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

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

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

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