When an Existing Loan at a Low Interest Rate Is

question 13

Multiple Choice

When an existing loan at a low interest rate is refinanced by a new loan at an interest rate between the current market rate and the rate of the old loan, the result is a

• A) combined rate.
• B) blended loan.
• C) wraparound loan.
• D) merged loan.

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Definitions:

Like-kind Exchange Provisions

Tax regulations allowing the deferral of tax liability when business or investment properties are exchanged for similar properties.

Partnership Interest

An ownership share in a partnership that represents a partner's stake in the profits, losses, and assets of the partnership.

Like-kind Exchange

A tax deferment strategy allowing for the exchange of similar types of properties without the immediate tax implications of selling the property.

IRC Section 121

A provision in the Internal Revenue Code that allows for the exclusion of up to $250,000 ($500,000 for married couples filing jointly) of capital gains from the sale of a primary residence.