Real Estate Exam Federal Law Practice Test 2025 Question Answers

1) Depreciation claimed for income tax purposes:

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

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

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

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

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

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

8) 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:

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

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

11) 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:

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

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

14) 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:

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

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

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

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

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

20) 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?

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

22) A REIT is like:

23) Federal income tax rates are generally:

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

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

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

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

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

29) Indications of independent contractor status include:

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

31) 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:

32) 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?

33) The Civil Rights Act of 1968 prohibits:

34) 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?

35) “Familial status” refers to:

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

37) 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:

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

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

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

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

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

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

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

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

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

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

48) Federal income tax rates are generally:

49) 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:

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