IAAO 101 CHAPTER 1- ASSESSMENT
& APPRAISAL THEORY QUESTIONS &
VERIFIED CORRECT ANSWERS
Ad Valorem - Correct Answer ✔✔ According to value
Property Tax is
A. an ad valorem tax
B. an ad hominem tax
C. a federal tax
D. a sales tax - Correct Answer ✔✔ A. an ad valorem tax
Assessor Responsibilities - Correct Answer ✔✔ Discovery, Listing, and Valuation
Situs - Correct Answer ✔✔ Taxable Location
Appraisal - Correct Answer ✔✔ an estimate of value; an opinion
Tax Rate - Correct Answer ✔✔ (Budget - Other Revenue) / Total Assessed Value
Effective Tax Rate - Correct Answer ✔✔ Current Taxes / Market Value
or
Assessment Ratio x Tax Rate
Market Value - Correct Answer ✔✔ the price at which a property would sell in an arm's
length transaction
Principles of Value - Correct Answer ✔✔ Desirability
Utility
Scarcity
Transferability (effective purchasing power)
Highest & Best Use - Correct Answer ✔✔ use that generates the highest net return
Principle of Balance - Correct Answer ✔✔ Maximum value is obtained when the uses of
land are perfectly complementary
Consistent Use Principle - Correct Answer ✔✔ Land and improvements must be valued
on same use
, 4 Tests of Highest & Best Use - Correct Answer ✔✔ Physically possible
Legally permissible
Financially feasible
Maximally productive
4 Tests of Highest & Best Use
A. Physically possible, Legally permissible, Financially feasible, Maximally productive
B. Physically possible, Legally permissible, Financially feasible, Minimally productive
C. Technically possible, Legally permissible, Financially feasible, Maximally productive
D. Technically possible, Legally questionable, Financially feasible, Maximally productive
- Correct Answer ✔✔ A. Physically possible, Legally permissible, Financially feasible,
Maximally productive
Real Estate - Correct Answer ✔✔ land and permanently affixed
structures/improvements
Real Estate is
A. property
B. land and structures
C. land and improvements
D. land and permanently affixed structures and improvements - Correct Answer ✔✔ D.
land and permanently affixed structures and improvements
Personal Property - Correct Answer ✔✔ All property not classified as real property;
movable
Also called personalty
Personal Property
A. is personalty
B. can be moved without causing damage
C. is all property not classified as Real Property
D. All of the above - Correct Answer ✔✔ D. All of the above
Personal Property is personalty, can be moved without causing damage, and is all
property not classified as Real Property
Equilibrium - Correct Answer ✔✔ the point at which the forces of supply and demand
are equal
& APPRAISAL THEORY QUESTIONS &
VERIFIED CORRECT ANSWERS
Ad Valorem - Correct Answer ✔✔ According to value
Property Tax is
A. an ad valorem tax
B. an ad hominem tax
C. a federal tax
D. a sales tax - Correct Answer ✔✔ A. an ad valorem tax
Assessor Responsibilities - Correct Answer ✔✔ Discovery, Listing, and Valuation
Situs - Correct Answer ✔✔ Taxable Location
Appraisal - Correct Answer ✔✔ an estimate of value; an opinion
Tax Rate - Correct Answer ✔✔ (Budget - Other Revenue) / Total Assessed Value
Effective Tax Rate - Correct Answer ✔✔ Current Taxes / Market Value
or
Assessment Ratio x Tax Rate
Market Value - Correct Answer ✔✔ the price at which a property would sell in an arm's
length transaction
Principles of Value - Correct Answer ✔✔ Desirability
Utility
Scarcity
Transferability (effective purchasing power)
Highest & Best Use - Correct Answer ✔✔ use that generates the highest net return
Principle of Balance - Correct Answer ✔✔ Maximum value is obtained when the uses of
land are perfectly complementary
Consistent Use Principle - Correct Answer ✔✔ Land and improvements must be valued
on same use
, 4 Tests of Highest & Best Use - Correct Answer ✔✔ Physically possible
Legally permissible
Financially feasible
Maximally productive
4 Tests of Highest & Best Use
A. Physically possible, Legally permissible, Financially feasible, Maximally productive
B. Physically possible, Legally permissible, Financially feasible, Minimally productive
C. Technically possible, Legally permissible, Financially feasible, Maximally productive
D. Technically possible, Legally questionable, Financially feasible, Maximally productive
- Correct Answer ✔✔ A. Physically possible, Legally permissible, Financially feasible,
Maximally productive
Real Estate - Correct Answer ✔✔ land and permanently affixed
structures/improvements
Real Estate is
A. property
B. land and structures
C. land and improvements
D. land and permanently affixed structures and improvements - Correct Answer ✔✔ D.
land and permanently affixed structures and improvements
Personal Property - Correct Answer ✔✔ All property not classified as real property;
movable
Also called personalty
Personal Property
A. is personalty
B. can be moved without causing damage
C. is all property not classified as Real Property
D. All of the above - Correct Answer ✔✔ D. All of the above
Personal Property is personalty, can be moved without causing damage, and is all
property not classified as Real Property
Equilibrium - Correct Answer ✔✔ the point at which the forces of supply and demand
are equal
