Study (Principles 1) Concepts Of Home Ownership Part Two Flash Cards

 
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(Principles 1) Concepts Of Home Ownership Part Two

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If homeowner has full replacement coverage policy for house that cost $100,000 five years ago, has depreciated by $5,000, and will cost $150,000 to rebuild today, what would insurance company pay if it burns completely to the ground?
$150,000
Most Texas homeowners' insurance policies cover losses caused by
Smoke
To be eligible for an exclusion of capital gains income, homeowner must have owned residence and occupied it as primary residence for how long before sale or exchange?
At least 2 of the 5 years
Insurance companies may use homeowner's credit score in deciding whether to issue policy and what to charge for it T/F?
T
Income tax deductions on loan interest on first and second homes
Are subject to loan limitations
If single person who is otherwise eligible for an exclusion marries someone who has used exclusion within two years prior to marriage, newly married homeowner would be allowed maximum exclusion of
$250,000
If homeowner has property insurance policy with coinsurance clause, homeowner must usually insure property for at LEAST what percent of replacement cost to collect for full replacement cost when damage occurs?
80
Flood insurance policies do NOT cover
An overflow caused by a busted hot water heater
First-time home buyer may make a penalty-free withdrawal from an IRA of up to
$10,000
Homeowners in upper income brackets whose gains exceed $500,000 ($250,000 for single taxpayer), capital gains tax rate is limited to what percent?
None of the Above
Taxpayer Relief Act of 1997 allows married homeowners who file jointly to exclude up to how much of capital gains realized on sale or exchange of principal residence?
$500,000
Homeowner may deduct, from his or her gross income, real estate
Taxes
Capital gains tax rates are limited to
5 percent in the 10 and 15 percent tax brackets
If homeowner does NOT meet occupancy requirements for exclusion of capital gains income, he or she is NOT eligible for any amount of exclusion T/F?
F
Real estate taxes may be deducted from a homeowner's income taxes T/F?
T
Homeowners in upper income brackets whose gains exceed $500,000 ($250,000 for single taxpayer), capital gains tax rate is limited to what percent?
15
On first and second homes, which may be deducted from income taxes?
Loan Interest
Insurance company will pay actual cash value of loss or percentage of replacement cost if homeowner has coinsurance clause and coverage on his or her property is
Less than the Coinsurance Clause Insurance
Unless mortgage is secured by taxpayer's principal residence, points are paid in cash at closing, and they are a charge for use of money, loan discount points will be prorated over term of loan T/F?
T
Texas homeowners' insurance policies combine five different types of coverage. Which is NOT included?
Automobile
Insurance companies settle property insurance claims on basis of which of the following?
All of the Above
In case of persons filing jointly but NOT sharing principal residence, an exclusion of what amount is available on qualifying sale or exchange of principal residence of one of the spouses?
$250,000
MOST Texas homeowners' insurance policies exclude losses caused by
Earthquake
Through 2008, all Americans are eligible for estate tax exemptions of
2 Million
Loan discount points may only be deducted from homeowner's gross income if points are
Paid in cash at closing
Texas HO-A policies provide replacement cost coverage in event of a covered loss T/F?
F
Homeowner who does NOT meet occupancy requirements for exclusion of capital gains income due to unforeseen circumstances may exclude fraction of maximum allowance equal to fraction of two years residency requirements were met T/F?
T
Because of coinsurance clauses, homeowners periodically should review all policies to be certain that coverage is equal to at LEAST 85 percent of current replacement cost of their homes T/F?
F
For MOST homeowners, the net result of the Taxpayer Relief Act of 1997 is that they will always pay capital gains tax on sale of their homes T/F?
F
Some loan discount points may be deducted from a homeowner's income taxes T/F?
T
Most Texas homeowners' insurance policies provide property coverage against fire or lightning and theft T/F?
T
As a condition for making loan, an individual lender may require flood insurance if any part of the property is in flood zone T/F?
T
National Flood Insurance Program will insure properties that are NOT in floodplain area T/F?
T
For income tax purposes, homeowners are entitled to four deductions from their gross income T/F?
T
Certain loan origination fees may be deducted from a homeowner's income taxes T/F?
T
Flood insurance generally covers damage caused by leaking hot water heater T/F?
F
To be eligible for the capital gains exclusion implemented by the Taxpayer Relief Act of 1997, homeowner must have owned residence and occupied it as principal residence for at LEAST three of the five years prior to sale or exchange T/F?
F
National Flood Insurance Act of 1968 was enacted by Congress to provide money for repairs and replacement of property to homeowners in floodplain areas who have no insurance T/F?
F
Loan discount points are deductible only in year of purchase and only under certain circumstances T/F?
T
Most Texas homeowners' insurance policies cover damage resulting from freezing pipes while the house is unoccupied T/F?
F
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