Sandra Smith Wants to Know the Purpose of a Title

question 25

Multiple Choice

Sandra Smith wants to know the purpose of a title search. What would you tell her?

• A) to gain a clear title to the property
• B) to make sure the person selling the property really owns it
• C) to protect you against challenges to the title
• D) All of the above

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Definitions:

Long-term Capital Losses

Financial losses realized from the sale of assets held for more than a year, which can be used to offset capital gains for tax purposes.

Short-term Capital Gains

Profits from the sale of an asset held for a year or less, typically taxed at higher rates than long-term capital gains.

Section 1202

A provision in the U.S. tax code offering exclusion on gains from the sale or exchange of qualified small business stock held for more than 5 years.

Preferential Rates

Tax rates lower than the standard rates, often applied to long-term capital gains and qualified dividends.