CA REAL ESTATE STATE EXAM QUESTIONS
How are ownership rights and interest in real property established by way of a court
proceeding?
A - cloud on title
B - equitable use
C- quiet title action
D - quitclaim
C - quiet title action
Answer Feedback: A quiet title action is proceeding to establish an individual's right to
ownership of real property against one or more adverse claimants.
The recording of an instrument gives:
A - actual notice
B - passive notice
C - absolute notice
D - constructive notice
D - constructive notice
Answer Feedback: Constructive notice is given by taking physical possession or by
recording an instrument.
Federal income tax rates on ordinary income are:
A - progressive
B - equal
C - flat
D - digressive
A - progressive
Answer Feedback: The more you make, the more you are taxed.
When title of a property is voluntary transferred without any money consideration, this
would be considered:
A - avulsion
B - eminent domain
,C - a gift
D - foreclosure
C - a gift
Answer Feedback: This describes a gift which is the only right choice of a voluntary
transfer without consideration (money).
Who would you contact if you feel your property has been over assessed by the county
assessor?
A - Local housing council
B - Board of equalization
C - County tax collector
D - Assessment appeals board
D - Assessment appeals board
Answer Feedback: You would contact this department to plead your case.
A single family home that had an assessed value that was much lower than the current
market value was sold on November 3rd at its current market value. What will the new
owners have to pay?
A - supplement tax based on the difference between the old assessed value and the
new assessed value for the remaining fiscal year
B - nothing
C - a prorated amount of tax
D - a flat tax of 10%
A - supplement tax based on the difference between the old assessed value and the
new assessed value for the remaining fiscal year
Answer Feedback: When a property is sold for more than the assessed value, the new
buyer will receive a supplemental tax bill based on the new assessed value.
An income property owner was figuring out their net income for tax purposes. They took
the gross income and deducted certain expenses. What cannot be deducted?
A - management expenses
B - cost of a fence
C - interest for a loan
D - depreciation
B - cost of a fence
,Answer Feedback: A fence is a capital improvement and cannot be deducted as an
expense for tax purposes.
When referring to a building bought for income purposes, the owner can deduct all of
the following for income tax purposes, except:
A - loss of rental due to vacancies
B - depreciation when the property value increases
C - interest payments on the second trust deed
D - cost of repairing the vacant units
A - loss of rental due to vacancies
Answer Feedback: Vacancy losses cannot be deducted from income.
A sale leaseback purchaser would be least concerned about the:
A - depreciated value of the building
B - condition of the improvement
C - location of the property
D - creditworthiness of the tenant
A - depreciated value of the building
Answer Feedback: Depreciated value has to do with the adjusted costs basis of the
building.
Why can a corporation not qualify as a "joint tenant" for ownership interest of real
property?
A - A corporation can be foreign or domestic
B - Only community property can be held as joint tenancy
C - It has perpetual existence
D - A corporation has a board of directors
C - It has perpetual existence
Answer Feedback: Corporations don't die and since one of the characteristics of joint
tenancy is the right of survivorship, a corporation owning real property in "joint tenancy"
would be an unfair advantage. Death is a requirement.
The assessment roll in real property taxes exists to establish the tax base. Who sets the
county tax rate?
A - The board of supervisors
B - The county assessor
, C - The state assessor
D - The federal government
A - The board of supervisors
Answer Feedback: The board supervisors of each county sets the maximum annual tax
on real property.
Which of the following is not an example of police power by the government?
A - eminent domain
B - zoning
C - the right to tax
D - adopt and enforce laws
C - the right to tax
Answer Feedback: Eminent domain requires a payment of just compensation for private
property. Taking it under the police power (such as zoning) does not require
compensation.
The Williamson Act was created to:
A - preserve agricultural land in California
B - assist low-income families with down payment assistance
C - provide appraisers with government sponsored classes
D - lawfully convict lenders involved in kickback schemes
A - preserve agricultural land in California
The Williamson Act was created in 1965 to benefit:
A - farmland owners by providing them with lower property taxes
B - low-income families with down payment assistance
C - real estate licensees requiring emergency funds
D - landlords during difficult tenant evictions
A - farmland owners by providing them with lower property taxes
When a licensee acts as a buyer's agent on a home listed by their broker, the broker
has a fiduciary duty to:
A - the parties involved
B - the buyer
C - the seller
D - the person who writes the check
How are ownership rights and interest in real property established by way of a court
proceeding?
A - cloud on title
B - equitable use
C- quiet title action
D - quitclaim
C - quiet title action
Answer Feedback: A quiet title action is proceeding to establish an individual's right to
ownership of real property against one or more adverse claimants.
The recording of an instrument gives:
A - actual notice
B - passive notice
C - absolute notice
D - constructive notice
D - constructive notice
Answer Feedback: Constructive notice is given by taking physical possession or by
recording an instrument.
Federal income tax rates on ordinary income are:
A - progressive
B - equal
C - flat
D - digressive
A - progressive
Answer Feedback: The more you make, the more you are taxed.
When title of a property is voluntary transferred without any money consideration, this
would be considered:
A - avulsion
B - eminent domain
,C - a gift
D - foreclosure
C - a gift
Answer Feedback: This describes a gift which is the only right choice of a voluntary
transfer without consideration (money).
Who would you contact if you feel your property has been over assessed by the county
assessor?
A - Local housing council
B - Board of equalization
C - County tax collector
D - Assessment appeals board
D - Assessment appeals board
Answer Feedback: You would contact this department to plead your case.
A single family home that had an assessed value that was much lower than the current
market value was sold on November 3rd at its current market value. What will the new
owners have to pay?
A - supplement tax based on the difference between the old assessed value and the
new assessed value for the remaining fiscal year
B - nothing
C - a prorated amount of tax
D - a flat tax of 10%
A - supplement tax based on the difference between the old assessed value and the
new assessed value for the remaining fiscal year
Answer Feedback: When a property is sold for more than the assessed value, the new
buyer will receive a supplemental tax bill based on the new assessed value.
An income property owner was figuring out their net income for tax purposes. They took
the gross income and deducted certain expenses. What cannot be deducted?
A - management expenses
B - cost of a fence
C - interest for a loan
D - depreciation
B - cost of a fence
,Answer Feedback: A fence is a capital improvement and cannot be deducted as an
expense for tax purposes.
When referring to a building bought for income purposes, the owner can deduct all of
the following for income tax purposes, except:
A - loss of rental due to vacancies
B - depreciation when the property value increases
C - interest payments on the second trust deed
D - cost of repairing the vacant units
A - loss of rental due to vacancies
Answer Feedback: Vacancy losses cannot be deducted from income.
A sale leaseback purchaser would be least concerned about the:
A - depreciated value of the building
B - condition of the improvement
C - location of the property
D - creditworthiness of the tenant
A - depreciated value of the building
Answer Feedback: Depreciated value has to do with the adjusted costs basis of the
building.
Why can a corporation not qualify as a "joint tenant" for ownership interest of real
property?
A - A corporation can be foreign or domestic
B - Only community property can be held as joint tenancy
C - It has perpetual existence
D - A corporation has a board of directors
C - It has perpetual existence
Answer Feedback: Corporations don't die and since one of the characteristics of joint
tenancy is the right of survivorship, a corporation owning real property in "joint tenancy"
would be an unfair advantage. Death is a requirement.
The assessment roll in real property taxes exists to establish the tax base. Who sets the
county tax rate?
A - The board of supervisors
B - The county assessor
, C - The state assessor
D - The federal government
A - The board of supervisors
Answer Feedback: The board supervisors of each county sets the maximum annual tax
on real property.
Which of the following is not an example of police power by the government?
A - eminent domain
B - zoning
C - the right to tax
D - adopt and enforce laws
C - the right to tax
Answer Feedback: Eminent domain requires a payment of just compensation for private
property. Taking it under the police power (such as zoning) does not require
compensation.
The Williamson Act was created to:
A - preserve agricultural land in California
B - assist low-income families with down payment assistance
C - provide appraisers with government sponsored classes
D - lawfully convict lenders involved in kickback schemes
A - preserve agricultural land in California
The Williamson Act was created in 1965 to benefit:
A - farmland owners by providing them with lower property taxes
B - low-income families with down payment assistance
C - real estate licensees requiring emergency funds
D - landlords during difficult tenant evictions
A - farmland owners by providing them with lower property taxes
When a licensee acts as a buyer's agent on a home listed by their broker, the broker
has a fiduciary duty to:
A - the parties involved
B - the buyer
C - the seller
D - the person who writes the check
