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[answered] 1. A property that produces an annual NOI of $100,000 was p


I want full detailed explanation of attached questions which formula to be used and explanation with details, Real Estate Finance And Investment Chapter 11, thanks.


1. A property that produces an annual NOI of $100,000 was purchased for $1,200,000. Debt

 

service for the year was $95,000 of which $93,400 was interest and the remainder was

 

principal. Annual depreciation is $38,095. What is the taxable income? (C)

 

(A) $5,000

 

(B) $6,600

 

(C) - $31,495

 

(D) - $33,095

 

2. An investor who has $75,000 in taxable income purchases a building that produces another

 

$15,000 in taxable income. According to the table below, what is the marginal tax rate? (D)

 

Taxable Income

 

$0 - $34,000

 

$34,001 - $82,150

 

Over $82,150 Marginal Tax Rate

 

15%

 

28%

 

31% (A) 29.50%

 

(B) 29.57%

 

(C) 28.00%

 

(D) 31.00%

 

3. A small office building is purchased of $1,200,000 with a balloon mortgage that is due at the

 

end of year 10. Payments are based on a 25 year amortization period. If one point was

 

charged, what annual amount can be deducted for tax purposes? (A)

 

(A) $1,200

 

(B) $480

 

(C) $0

 

(D) $800

 

4. The adjusted basis can be defined as: (A)

 

(A) Original cost + capital improvements - accumulated depreciation

 

(B) Sales price - mortgage balance - sales costs

 

(C) Sales price - accumulated depreciation

 

(D) Original cost - mortgage balance - sales costs -1-

 


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