Chabot College
April, 1993
Course Outline for Real Estate 87
REAL ESTATE TAXATION AND EXCHANGES
Catalog Description:
87 – Real Estate Taxation and Exchanges
3 units
Tax aspects of real estate transactions as they affect buyers and sellers. Aspects of real estate
marketing that deal with exchanges. Laws pertaining to real estate taxation that affect exchange
opportunities. Prerequisite: Real Estate 80. 3 hours.
Prerequisite Skills:
Before entering this course, the student should understand:
1. basic concepts in preparing for entry into the real estate business;
2. the fundamentals of liens and encumbrances, contracts, agencies, contracts of real property,
financing of real estate leases, deeds, subdivisions, and other general information and
fundamental background as a preparation for entry into other courses in real estate;
3. the principles and practices that both consumers and business people need to apply.
Expected Outcomes for Students:
Upon completion of this course, the student should:
1. know and understand the sequence of events leading to an exchange transaction;
2. know the basic legal references pertaining to real estate taxation;
3. be familiar with those sections of the Internal Revenue Codes which apply in exchange
transactions and tax problems.
Course Content
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Adjusted basis for determining gain or loss
Basis of property: cost
Basis of property included in inventory
Basis of property acquired from a decedent
Basis of property acquired by gifts and transfers in trust
Adjustment of basis
Exchange of property deed for productive use or investment
Involuntary conversions
Introduction to exchanges
Prequalifying people, properties and potential exchanges
Income tax considerations of exchanges
Depreciation as a factor in exchanges
Effects of 1964 tax law changes
Tax basis and adjusted tax basis after the exchanges
The exchange contract
Installment sales
Home trade-in plans
Deductions for capital gains
Alternative tax
Limitation of capital assets
Capital loss carry over
Definition of capital assets
Holding period of property
Property used in the trade or business and involuntary conversions
Dealers in securities
Real estate property subdivided for sale
Amortization in excess of depreciable property
Gain from sale of certain property between spouses or between an individual and a controlled
corporation
29. Gains from disposition of certain depreciable property
30. Rate of tax
31. Taxable gifts
Chabot College
Course Outline for Real Estate 87, Page 2
April 1993
]
Methods of Presentation:
1. Lecture
2. Guest lectures
3. Case discussion
Methods of Evaluating Student Progress:
1. Quizzes
2. Case problems
3. Final examination
Textbook(s) (Typical):
1. Real Estate Investment and Taxation, Stephen D. Messner, Prentice-Hall.
Special Student Materials: None
c:\documents\word\outlines\real estate\rest 87 4-93.doc