Before you read
Test yourself first: 5 questions
Question 1 of 5
A homeowner's equity equals:
Answer: A. Equity = current market value − outstanding debt against the property.
Question 2 of 5
Which of the following expenses would appear in the operating budget rather than being charged against a capital reserve account?
Answer: C. Routine, recurring costs like landscaping and janitorial service are ordinary operating expenses, while major roof, HVAC, and paving replacements are capital items drawn from reserves.
Question 3 of 5
The EPA's recommended action level at which homeowners should take steps to reduce indoor radon is:
Answer: C. The EPA recommends remediation (radon mitigation) when indoor radon levels reach or exceed 4.0 picocuries per liter (pCi/L) of air.
Question 4 of 5
An agent tells homeowners that minority families are moving into the area and that they should sell now before property values drop. This practice is called:
Answer: C. Blockbusting (also called panic selling) is inducing owners to sell by suggesting that the entry of a protected class into the neighborhood will lower property values.
Question 5 of 5
An agent tells homeowners that minority families are moving into the area and that they should sell now before property values fall. This unethical and illegal tactic is known as:
Answer: C. Blockbusting (panic selling) is inducing owners to sell by claiming that the entry of a protected class will lower property values or change neighborhood character.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
Investors defer gain through a 1031 LIKE-KIND EXCHANGE: investment or business real property swapped for other investment real property, using a qualified intermediary, identifying replacements within 45 days and closing within 180; receiving cash 'BOOT' triggers tax. Depreciation (27.5-year straight-line on residential rentals) shelters income but is recaptured at sale. Mortgage interest and property taxes remain itemized deductions within federal caps. Agents flag issues; CPAs give tax advice.
Capital Gains, 1031 & Homeowner Tax Breaks: FAQs
Is Capital Gains, 1031 & Homeowner Tax Breaks on the real estate exam?
Yes. Brokerage & Practice is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
