Real Estate Exam Federal Law Practice Test 2025 Question Answers

1) Depreciation claimed for income tax purposes:

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

3) Federal income tax rates are generally:

4) 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?

5) 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?

6) 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?

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) “Familial status” refers to:

9) A REIT is like:

10) Indications of independent contractor status include:

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

12) 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:

13) 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:

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

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

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

17) Federal income tax rates are generally:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

34) 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:

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

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

37) 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:

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

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

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

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

42) 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:

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

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

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

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

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

48) The Civil Rights Act of 1968 prohibits:

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

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