Fact Pattern 15-3​ County Title Company Processes Information Furnished by Others to Transfer

question 13

Multiple Choice

Fact Pattern 15-3​
County Title Company processes information furnished by others to transfer title to real estate from a seller to a buyer. In performing this task for a sale of land from Doyle to Ezra, the furnished information is mistaken.
-Refer to Fact Pattern 15-3. The contract between Doyle and Ezra that includes the mistake may be rescinded if the mistake concerns

• A) ​a basic assumption on which the contract was made.
• B) ​a term in the contract subject to only one reasonable interpretation.
• C) ​a detail on which the parties had a true "meeting of the minds."
• D) ​a third party, such as County Title.

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Definitions:

Gift Tax

A federal tax on the transfer of property by gift from one individual to another, where the giver receives nothing or less than full value in return.

Assumed Mortgage

When a property buyer takes over the seller's existing mortgage, it is referred to as an assumed mortgage.

Recognized Gain

The portion of a gain that is subject to tax, as realized from the sale or exchange of a capital asset beyond the original purchase price.

Section 1245

A section of the U.S. Internal Revenue Code that deals with the tax treatment of depreciable property and requires the recapture of depreciation upon sale of the property as ordinary income.