ASREB (Arizona School of Real Estate and Business); Sales
Competency Certification Study Guide Exam Questions with
Certified for Accuracy Answers 2025/2026
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
Which of the following would not affect the basis of a property? - correct answer
Property repairs
A corporation wishes to raise new money without creating any new debt. They would be
advised to: - correct answer Sell stock
A passive investor in Real Estate Syndication could be called: - correct answer Limited
partner
A building has a total economic life of 30 years. The building is now 6 years old and has
a depreciated value of $375,000. What was the value of the building when it was new? -
correct answer $468,750
John purchased a home for $120,000 and later added a garage to the home at a cost of
$25,000. He subsequently sold his home for $175,000 minus a 7% real estate
commission and $10,000 in closing costs. What would be his adjusted basis? - correct
answer $145,000
What can a renter deduct on a net lease? - correct answer Property taxes
Cash on cash return is: - correct answer money received on equity
In order to qualify for a tax deferred exchange, the properties must be: - correct
answer Like for Like
,While a structure is adding value to the land, this is called: - correct answer Economic
life
When a person declares a tax free gain on a personal residence, the minimum holding
period is: - correct answer 2 years
The type of investment that requires at least 100 investors is called - correct answer
REIT
After all property expenses are paid, that which remains i called: - correct answer Net
operating income
Cash on cash rate of return is measured against which of the following? - correct
answer Equity
Value minus debt is best defined as - correct answer Equity
A residential tenant has improvements done to the property and the economic life is 20
years, what is the annual straight line depreciation? - correct answer 5%
A buyer wishes to buy an older home in a low income area. This home is in need of
rehabilitation but has a good future due to growing economy. Which of the following
loans would best suit the buyer's needs? - correct answer FHA 203K
Which of the following types of loans are guaranteed? - correct answer VA
Which of the following is true regarding a Graduated Payment Mortgage? - correct
answer There would be a change in payment but not rate
Which of the following loan would have PMI? - correct answer Conventional
, What type of loan has the highest loan to value ratio? - correct answer VA
Who pays the discount points on a VA loan? - correct answer Agreement of parties
What charge would be paid at closing on a high risk conventional loan? - correct
answer PMI
Which of the following concepts would apply to both FHA and VA lending? - correct
answer Or more clause
When a borrower is qualifying for a VA guaranteed loan, which of the following would
not apply? - correct answer Private mortgage insurance
When a buyer obtains a new VA loan, who pays for the document preparation fees? -
correct answer Seller
When a new VA loan is created, who pays for the Tax Service Fee - correct answer
Seller
When a VA loan is assumed by a new qualified veteran using his eligibility, the loan is -
correct answer Assumed with novation
FHA is administered by the department of: - correct answer HUD
The most frequently used FHA insured loan would be which of the following - correct
answer 203 B
To obtain a VA guaranteed loan, a buyer would need to produce for the lender: - correct
answer Certificate of Eligibility
Competency Certification Study Guide Exam Questions with
Certified for Accuracy Answers 2025/2026
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
Which of the following would not affect the basis of a property? - correct answer
Property repairs
A corporation wishes to raise new money without creating any new debt. They would be
advised to: - correct answer Sell stock
A passive investor in Real Estate Syndication could be called: - correct answer Limited
partner
A building has a total economic life of 30 years. The building is now 6 years old and has
a depreciated value of $375,000. What was the value of the building when it was new? -
correct answer $468,750
John purchased a home for $120,000 and later added a garage to the home at a cost of
$25,000. He subsequently sold his home for $175,000 minus a 7% real estate
commission and $10,000 in closing costs. What would be his adjusted basis? - correct
answer $145,000
What can a renter deduct on a net lease? - correct answer Property taxes
Cash on cash return is: - correct answer money received on equity
In order to qualify for a tax deferred exchange, the properties must be: - correct
answer Like for Like
,While a structure is adding value to the land, this is called: - correct answer Economic
life
When a person declares a tax free gain on a personal residence, the minimum holding
period is: - correct answer 2 years
The type of investment that requires at least 100 investors is called - correct answer
REIT
After all property expenses are paid, that which remains i called: - correct answer Net
operating income
Cash on cash rate of return is measured against which of the following? - correct
answer Equity
Value minus debt is best defined as - correct answer Equity
A residential tenant has improvements done to the property and the economic life is 20
years, what is the annual straight line depreciation? - correct answer 5%
A buyer wishes to buy an older home in a low income area. This home is in need of
rehabilitation but has a good future due to growing economy. Which of the following
loans would best suit the buyer's needs? - correct answer FHA 203K
Which of the following types of loans are guaranteed? - correct answer VA
Which of the following is true regarding a Graduated Payment Mortgage? - correct
answer There would be a change in payment but not rate
Which of the following loan would have PMI? - correct answer Conventional
, What type of loan has the highest loan to value ratio? - correct answer VA
Who pays the discount points on a VA loan? - correct answer Agreement of parties
What charge would be paid at closing on a high risk conventional loan? - correct
answer PMI
Which of the following concepts would apply to both FHA and VA lending? - correct
answer Or more clause
When a borrower is qualifying for a VA guaranteed loan, which of the following would
not apply? - correct answer Private mortgage insurance
When a buyer obtains a new VA loan, who pays for the document preparation fees? -
correct answer Seller
When a new VA loan is created, who pays for the Tax Service Fee - correct answer
Seller
When a VA loan is assumed by a new qualified veteran using his eligibility, the loan is -
correct answer Assumed with novation
FHA is administered by the department of: - correct answer HUD
The most frequently used FHA insured loan would be which of the following - correct
answer 203 B
To obtain a VA guaranteed loan, a buyer would need to produce for the lender: - correct
answer Certificate of Eligibility
