Real Estate Exam Federal Law Practice Test 2026 Question Answers

1) 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:

2) Indications of independent contractor status include:

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

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

5) Depreciation claimed for income tax purposes:

6) 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:

7) 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:

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

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

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

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

14) The Civil Rights Act of 1968 prohibits:

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

16) “Familial status” refers to:

17) 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:

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

19) A REIT is like:

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

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

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

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

24) 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?

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

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

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

28) 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?

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

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

31) 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?

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

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

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

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

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

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

38) Federal income tax rates are generally:

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

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

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

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

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

44) 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:

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

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

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

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

49) Federal income tax rates are generally:

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