ASREB (Arizona School of Real Estate and Business) and
Business Problem set study Exam Questions and complete
solution Guaranteed Success 2025/2026
The vendee is the: - correct answer Buyer in an agreement for sale
What is it called when the Federal Reserve loans money to commercial banks? -
correct answer Discount rate
After a trustee's sale the excess proceeds go to the: - correct answer Trustor
A construction loan is generally considered a: - correct answer Short term- interim
Construction loan monies are generally obtained from - correct answer Commercial
banks
When a sale lease back takes place the advantage for the lessee is that he can: -
correct answer Deduct the rent as an expense
Which of the following could be borrowed in a tax deferred exchange? - correct answer
Boot
When can the tax on a capital gain be deferred? - correct answer Property exchange
Which of the following would not be considered an income tax deduction: - correct
answer Tax depreciation on your personal residence
A real estate investment that acts as a mutual fund but does not give you individual
ownership is best described as a: - correct answer Real Estate Investment Trust, a
security instrument
,When figuring capital gain from the sale of a property, which of the following would
lower your gain? - correct answer Capital improvements
When a new stock is being offered to the public, which of the following would most likely
be offered as a disclosure? - correct answer Prospectus
If a party wants to maximize leverage, he should: - correct answer Have the highest
loan to value ratio
When a buyer is using 100% leverage in a transaction, they would least likely be
interested in: - correct answer short term loan
Boot is best defined as: - correct answer Loan interest
Regarding residential owner occupied property, which of the following would be a
deduction on a Federal Income Tax return - correct answer Price Paid
Buyer wants to know his cash on cash return. What is he most interested in? - correct
answer Investment
When can an owner of a single family residence depreciate the property for tax
purposes: - correct answer If the property is a rental
You own a duplex and rent one unit. Which of the following is true? - correct answer
You may deduct the expenses only for the rented unit
Which of the following can be deducted from income tax: - correct answer Property
taxes and interest payments
What is tax deductible on your personal residence? - correct answer Interest and taxes
,Cash on cash return would involve which of the following concepts - correct answer
Leverage
If property is to be depreciated, it must be: - correct answer Improved
The basis of a personal residence is affected by which of the following: - correct
answer Patio addition
If a seller conveys property with the idea of completing a tax deferred exchange and
designates the exchange property 25 days after close of escrow, which of the following
is true? - correct answer The seller has 45 days to identify that exchange property at
close of escrow
To have qualified tax deferred exchange, which of the following would be required: -
correct answer Properties are held for investments
If you were a passive investor in a limited partnership, you would be entitled to all of the
following information and rights EXCEPT: - correct answer Management and control
If you are a passive investor with no voice in management, this would best describe: -
correct answer Real estate investment trust
Which of the following listed below would be the best example of a progressive form of
taxation? - correct answer Income tax
When a person sells an income producing property and the taxable gain is being
calculated, which of the following would the seller be most interested in? - correct
answer Capital improvements
A borrower is required to put 10% down for the purchase of a property. The 10% down
would be considered: - correct answer Equity
, When a corporation owns property as tenants in common with other corporations, how
are they most likely taxed? - correct answer Pro rata share
What is deductible on a federal tax return? - correct answer Depreciation on income
property
What is not part of a tax deferred exchange? - correct answer Highest and best use
When an exchange of real property takes place, which of the following items listed
below would trigger a taxable event? - correct answer Assuming a loan of less value
What form of real estate financing would fall under federal securities laws? - correct
answer REIT
When two parties are involved in a tax deferred exchange, which of the following could
be financed? - correct answer Boot
A property is valued at $245,900 after 6 years of depreciation. The rate of depreciation
is 2 percent per year. What was the original value of the property? - correct answer
$279,431
Each unit in a fourplex rents for $950 per month. With a price of $342,000 the annual
gross multiplier is: - correct answer 7.5
In order to qualify for a $250,000 tax free exemption, which of the following statements
are true? - correct answer One must have lived in the house for 2 years
When the seller pays a commission, which of the following is correct? - correct answer
The commission is considered an expense of sale
The basis on a new personal residence will be increased by which of the following -
correct answer Acquisition costs
Business Problem set study Exam Questions and complete
solution Guaranteed Success 2025/2026
The vendee is the: - correct answer Buyer in an agreement for sale
What is it called when the Federal Reserve loans money to commercial banks? -
correct answer Discount rate
After a trustee's sale the excess proceeds go to the: - correct answer Trustor
A construction loan is generally considered a: - correct answer Short term- interim
Construction loan monies are generally obtained from - correct answer Commercial
banks
When a sale lease back takes place the advantage for the lessee is that he can: -
correct answer Deduct the rent as an expense
Which of the following could be borrowed in a tax deferred exchange? - correct answer
Boot
When can the tax on a capital gain be deferred? - correct answer Property exchange
Which of the following would not be considered an income tax deduction: - correct
answer Tax depreciation on your personal residence
A real estate investment that acts as a mutual fund but does not give you individual
ownership is best described as a: - correct answer Real Estate Investment Trust, a
security instrument
,When figuring capital gain from the sale of a property, which of the following would
lower your gain? - correct answer Capital improvements
When a new stock is being offered to the public, which of the following would most likely
be offered as a disclosure? - correct answer Prospectus
If a party wants to maximize leverage, he should: - correct answer Have the highest
loan to value ratio
When a buyer is using 100% leverage in a transaction, they would least likely be
interested in: - correct answer short term loan
Boot is best defined as: - correct answer Loan interest
Regarding residential owner occupied property, which of the following would be a
deduction on a Federal Income Tax return - correct answer Price Paid
Buyer wants to know his cash on cash return. What is he most interested in? - correct
answer Investment
When can an owner of a single family residence depreciate the property for tax
purposes: - correct answer If the property is a rental
You own a duplex and rent one unit. Which of the following is true? - correct answer
You may deduct the expenses only for the rented unit
Which of the following can be deducted from income tax: - correct answer Property
taxes and interest payments
What is tax deductible on your personal residence? - correct answer Interest and taxes
,Cash on cash return would involve which of the following concepts - correct answer
Leverage
If property is to be depreciated, it must be: - correct answer Improved
The basis of a personal residence is affected by which of the following: - correct
answer Patio addition
If a seller conveys property with the idea of completing a tax deferred exchange and
designates the exchange property 25 days after close of escrow, which of the following
is true? - correct answer The seller has 45 days to identify that exchange property at
close of escrow
To have qualified tax deferred exchange, which of the following would be required: -
correct answer Properties are held for investments
If you were a passive investor in a limited partnership, you would be entitled to all of the
following information and rights EXCEPT: - correct answer Management and control
If you are a passive investor with no voice in management, this would best describe: -
correct answer Real estate investment trust
Which of the following listed below would be the best example of a progressive form of
taxation? - correct answer Income tax
When a person sells an income producing property and the taxable gain is being
calculated, which of the following would the seller be most interested in? - correct
answer Capital improvements
A borrower is required to put 10% down for the purchase of a property. The 10% down
would be considered: - correct answer Equity
, When a corporation owns property as tenants in common with other corporations, how
are they most likely taxed? - correct answer Pro rata share
What is deductible on a federal tax return? - correct answer Depreciation on income
property
What is not part of a tax deferred exchange? - correct answer Highest and best use
When an exchange of real property takes place, which of the following items listed
below would trigger a taxable event? - correct answer Assuming a loan of less value
What form of real estate financing would fall under federal securities laws? - correct
answer REIT
When two parties are involved in a tax deferred exchange, which of the following could
be financed? - correct answer Boot
A property is valued at $245,900 after 6 years of depreciation. The rate of depreciation
is 2 percent per year. What was the original value of the property? - correct answer
$279,431
Each unit in a fourplex rents for $950 per month. With a price of $342,000 the annual
gross multiplier is: - correct answer 7.5
In order to qualify for a $250,000 tax free exemption, which of the following statements
are true? - correct answer One must have lived in the house for 2 years
When the seller pays a commission, which of the following is correct? - correct answer
The commission is considered an expense of sale
The basis on a new personal residence will be increased by which of the following -
correct answer Acquisition costs
