Florida Real Estate Exam 2024 Questions with correct Answers

Florida Real Estate Exam 1031 tax-deferred exchange - Answer- Section 1031 of the Internal Revenue Code allows the owner of real property to sell that property and then reinvest in a "like-kind" property and defer paying any capital gains taxes; strict IRS rules regulate this type of exchange Ex. Real estate investors can take advantage of the 1031 tax-deferred exchange to defer capital gains taxes when selling a property, provided the money is rolled into another "like" purchase abutting - Answer- Land parcels that share a common border Ex. Many neighbors find that fences make abutting properties more tolerable. acceleration clause - Answer- Allows a lender to demand immediate and full payment of all debt owed if a buyer defaults or fails to meet certain conditions that apply to the loan Ex. When Wendy stopped making home loan payments, her lender told her she must pay off her entire balance or risk foreclosure. accession - Answer- The addition of value to property through labor or the addition of new materials, including an increase in land through natural processes Ex. Jonathan's property borders a bay. The bay receded, and Jonathan gained an extra 10 feet of property to his land through accession; also, Chris built a fence on his neighbor's property with no agreement allowing Chris to remove the fence. The neighbor now owns the fence. accessory use - Answer- An incidental or subordinate use to the primary use of the property Ex. Andy's military bunker in his back yard constituted an accessory use of the property. accounting - Answer- One of the fiduciary duties, accounting means an agent is accountable for any funds or properties entrusted to the agent. This is a duty that survives termination of an agency agreement Ex. Cameron accepted an earnest money deposit from his buyer. His duty of accounting means that he must safeguard the funds and handle them according to the agreement with his client and the policies of his firm. accretion - Answer- The gradual growth in the size of a land parcel due to water-deposited sand, silt, or gravel Ex. Jillian's property grew through accretion when the creek flow created a long sandbar accrued items - Answer- Expenses that have been incurred but aren't due yet, e.g. property taxes Ex. At closing, accrued items must be accounted for on the settlement statement. If the seller has accrued expenses not yet payable, the amount accrued will be a seller debit and buyer credit. acknowledgment - Answer- A requirement for deed transfer; a public official must acknowledge, usually by a notary public, the grantor's signature Ex. Gary purchased a duplex. The grantor signed the deed; a notary public acknowledged his signature. acre - Answer- A unit of land that is equal to 43,560 square feet Ex. The Jones farmhouse was on 10 acres. Their parcel had 435,600 square feet. active fraud - Answer- Intentional misstatement of a material fact; action taken by one party to deceive a second party in an attempt to consummate a contract or transaction Ex. "Sure, the foundation is perfectly safe!" Lisa said, even though she knew full well that there was a crack the size of Toledo in it. act of waste - Answer- Abuse of a property by a person who holds possession through a life estate Ex. Minerva inherited a life estate to a historic mansion and turned it into an illegal video gaming parlor. Also, Charles, who is in possession of real property as a life estate, failed to maintain the property. actual notice - Answer- Express notice given directly to a person or actual knowledge that is known