2026 additional homestead exemption
$26,411
The maximum second exemption band for non-school levies. With the first $25,000, the combined standard reduction is up to $51,411 for those levies.
3% of the exam · 9 free questions
Florida Taxes Affecting Real Estate Practice Questions and Answers
Practice Florida real estate taxes with 9 free scored questions, a 2026 millage calculator, and six worked examples. Learn the homestead bands, Save Our Homes, tax certificates, and federal gain rules, with explanations of every choice. No account needed.
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Taxes Affecting Real Estate Practice Questions
9 practice questions on taxes affecting real estate, scored, each with a full explanation after you answer. Every question is also written out below if you would rather study at your own pace.
9 questions
~7 min
3% of the exam
All 9 questions and explanations are free. Taxes Affecting Real Estate carries 3% of the published sales associate exam outline, about 3 questions. This focused quiz does not predict your state-exam score.
01 / Put the values in order
Three values. One property.
Use the tax year and figures stated in the question. An assessment cap comes before exemptions; the millage rate comes after them.
Step 1
Just value
The property's market value for assessment purposes. The property appraiser determines it as of January 1 under the applicable valuation rules.
$400,000 just valueStep 2
Assessed value
Value after the applicable assessment rules and limitations. Save Our Homes and portability affect this step, before exemptions.
$240,000 assessed valueStep 3
Taxable value
Assessed value minus the exemptions applicable to that levy. School and non-school taxable values can differ on the same property.
$215,000 school / $188,589 non-school
These linked examples assume a fully eligible 2026 homestead with only the standard exemptions. F.S. 192.042: January 1 assessment date · F.S. 196.031: standard homestead exemptions · Florida DOR: 2026 additional exemption, $26,411
The millage formula
Taxable value × mills ÷ 1,000 = tax
One mill is $1 per $1,000 of taxable value. For example, 20 mills = 0.020 = 2%, not 20%. Calculate school and non-school taxes on their respective taxable values, then add the amounts.
02 / Use the 2026 figures
Homestead works in bands.
The first $25,000 applies to all ad valorem levies. The additional exemption begins above $50,000 and applies only to non-school levies.
2026 Save Our Homes increase limit
2.7%
The ordinary cap on an eligible property's assessed-value increase. It is separate from the exemption and does not cap the tax rate or final bill.
| Assessed-value band | School levies | Non-school levies |
|---|---|---|
| First $25,000 | Exempt | Exempt |
| Above $25,000 through $50,000 | Taxable | Taxable |
| Above $50,000 through $76,411 | Taxable | Exempt, up to $26,411 |
| Above $76,411 | Taxable | Taxable |
A $60,000 assessment does not get a $51,411 subtraction.
Only $10,000 is above the second band's $50,000 starting point. With the standard exemptions, school taxable value is $35,000 and non-school taxable value is $25,000. The $25,000 to $50,000 band remains taxable for both.
The standard homestead exemption also does not remove non-ad valorem assessments for special benefits.
If an exam problem expressly supplies an exemption amount or another tax year, use those facts. These examples label the 2026 roll so the annual adjustment is clear.
03 / Learn by changing the numbers
Florida millage practice calculator
See the two taxable values, each levy, and the combined total. The $60,000 example makes the partial second exemption easier to understand.
Exam practice / 2026 figures
Try the two-levy calculation.
Change one figure and watch the taxable values and tax amounts update. Start with assessed value; this tool does not determine eligibility or apply Save Our Homes for you.
Use assessed value after any assessment limitation.
Enter mills, such as 6. One mill = $1 per $1,000.
Enter the combined non-school rate for this example.
Tax at the stated rates
$3,930.25
School and non-school levies combined, before payment discounts.
- First exemption / All levies
- $25,000.00
- Additional exemption / Non-school only
- $26,411.00
- School taxable value
- $215,000.00
- School tax / 6 mills
- $1,290.00
- Non-school taxable value
- $188,589.00
- Non-school tax / 14 mills
- $2,640.25
Each levy = its taxable value × mills ÷ 1,000. Each tax amount is rounded to cents before the two are added.
The additional exemption reduces non-school taxable value only. The school calculation keeps its own taxable value.
Assumes a fully eligible owner when homestead is selected. Includes only the standard exemptions and the stated rates. Additional exemptions and non-ad valorem charges are separate.
Uses the 2026 amounts published by Florida DOR: 2026 additional exemption, $26,411 and the levy rules in F.S. 196.031: standard homestead exemptions. The entered rates are practice figures, not a county's adopted millage rates.
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04 / Understand the assessment benefit
Save Our Homes, portability, and other tax benefits
Keep an assessment limit, a value exemption, and a federal income-tax deduction separate. They change different parts of the calculation.
Save Our Homes limits assessed value, not the bill
Beginning the year after a property receives homestead exemption, the ordinary annual reassessment increase is limited to the lower of 3% or the preceding year's CPI change. For 2026, that limit is 2.7%. Assessed value cannot exceed just value. Millage can change, and additions or improvements have separate rules. Even if market value falls, assessed value can rise toward it within the applicable cap.
Buying a home does not preserve the seller's tax bill
After an ordinary change of ownership, the property is generally reassessed at just value on January 1 of the following year, subject to statutory exceptions and any qualifying portability. A buyer should establish their own homestead eligibility. The seller's assessment cap is not automatically the buyer's cap.
Portability moves an assessment benefit
An eligible owner can transfer up to $500,000 of the Save Our Homes assessment difference to a new Florida homestead. The owner must have received homestead exemption as of January 1 of one of the three immediately preceding years. This is not simply three years measured from closing. Apply for the transfer with the new homestead application. A lower-value replacement home uses a proportional calculation; see both worked examples below.
Additional personal exemptions have their own conditions
Section 196.202 provides a $5,000 exemption for qualifying Florida residents who are widows, widowers, blind, or totally and permanently disabled. This is a reduction in taxable property value, not a $5,000 tax refund. Other provisions address qualifying disabled veterans, total disability, surviving spouses, deployed servicemembers, and locally adopted senior exemptions. Check eligibility, documentation, income conditions where applicable, and which levies each benefit covers.
Immune, exempt, and partially exempt property
Immunity concerns the government's authority to tax; a Florida county generally has sovereign tax immunity for its property within its borders. That immunity does not shield its property in another county, as the Florida Supreme Court held in 2024. An exemption removes a tax that otherwise could apply. A partial exemption leaves some value taxable, as with an ordinary homestead. Do not assume every publicly owned parcel or private leasehold receives identical treatment, or that a charitable label alone establishes an exemption.
Greenbelt is an agricultural classification
Florida's Greenbelt law bases qualifying agricultural land's assessment on its agricultural use. It is not a promise of zero property tax and does not follow from agricultural zoning alone. The land must be used primarily for bona fide, good-faith commercial agriculture and meet the application requirements. The property appraiser evaluates the actual use; a minimum acreage cannot be required as a condition of agricultural assessment.
Portability: compare the new home's just value with the old home's.
Same or higher: subtract the qualifying old assessment difference, up to $500,000, from the new just value.
Lower: new just value ÷ old just value × old assessed value gives the new assessed value before exemptions, subject to the $500,000 benefit cap. The examples below assume one eligible owner and no other adjustments.
05 / Follow the tax year
Assessment, appeal, payment, and delinquency
The property appraiser determines values and qualifying benefits. Local taxing authorities adopt millage. The tax collector handles billing and collection. A TRIM notice is a proposed-tax notice, not the final bill.
| Event and timing | What to do or recognize |
|---|---|
| Annual assessmentJanuary 1 | Value and status are assessed for that tax year. The property appraiser determines values and qualifying exemptions. |
| Homestead applicationUsual statutory deadline: March 1 | File with the county property appraiser. Check that year's filing calendar for weekends, holidays, and the applicable late-filing provisions. |
| Valuation challenge25 days after the TRIM notice is mailed | File a valuation petition with the VAB clerk. An informal conference with the property appraiser is optional and does not extend the petition deadline. Exemption and classification denials have separate notice-based rules. |
| Tax bills payableNovember 1, ordinarily | The statute says November 1 or as soon afterward as the collector receives the certified roll. The 2026 bill ordinarily becomes payable in November 2026. |
| DelinquencyApril 1 of the following year, ordinarily | For the 2026 roll, that ordinarily means April 1, 2027. If later, the statute uses the point immediately after 60 days from mailing the original tax notice. Check the notice and applicable calendar extensions. |
Early-payment discounts on a $4,000 bill
- November4%Pay $3,840
- December3%Pay $3,880
- January2%Pay $3,920
- February1%Pay $3,960
- March0%Pay $4,000
This is the ordinary schedule. F.S. 197.162: payment discounts and extensions also provides a 4% period tied to sending the original notice, rules for corrected notices, and qualifying weekend or holiday extensions.
Disagree with the assessed value?
Keep the appeal deadline in view.
- Read the TRIM notice. Check the value, exemption, and rate information.
- Consider an informal conference. Bring evidence to the property appraiser; this step is optional.
- File a timely VAB petition. The ordinary valuation deadline is 25 days after the notice is mailed. A conference does not extend it.
- Review the judicial route. Circuit-court review has separate filing and payment conditions. Use the applicable notice and governing procedure.
Taxes remain unpaid?
A certificate buys a lien.
At the certificate sale, bidders compete for the lowest interest rate they will accept. The winning bidder receives a tax lien, not the right to move into the home.
A holder may apply for a tax deed after two years have elapsed since April 1 of the certificate's year of issuance and before cancellation. Required payments, notice, redemption rights, and the separate sale process still matter.
Do not measure this waiting period from the auction date or assume title passes when the two years end.
06 / Federal income taxes
Gain first. Exclusion second.
Cash left after paying off a mortgage is not the same as gain. Start with amount realized and adjusted basis before considering the seller's tax treatment.
Step 1 / Amount realized
Selling price − selling expenses
For the simple cash-sale examples here, subtract the seller's qualifying selling costs. A mortgage payoff is not another selling-expense deduction in the gain formula.
Step 2 / Adjusted basis
Starting basis + additions − reductions
Qualifying capital improvements can increase basis. Allowed or allowable depreciation can reduce it. Ordinary upkeep is not automatically a capital improvement.
Step 3 / Gain
Amount realized − adjusted basis
Only after finding gain should you apply the Section 121 eligibility rules and limits. An exclusion cannot exceed the gain eligible for exclusion.
Eight federal distinctions to review
The home-sale exclusion has ownership, use, and timing tests
A qualifying individual can generally exclude up to $250,000 of principal-residence gain. For the usual $500,000 married-filing-jointly limit, either spouse must satisfy ownership, both must satisfy use, and neither may be disqualified by a recent exclusion. The normal ownership and use tests are two years within the five years ending on the sale, with a separate two-year look-back rule. Exceptions and partial exclusions exist. Gain attributable to depreciation allowed or allowable after May 6, 1997 cannot be excluded under Section 121, and nonqualified use can limit the exclusion.
Rental taxable income is not cash flow
Start with rental income, then subtract allowable operating expenses, deductible interest, and depreciation. Mortgage principal is not a current rental expense. Setting money aside for replacements does not by itself create a deduction. Land is not depreciable. Under the general depreciation system, residential rental buildings normally use 27.5 years and nonresidential real property normally uses 39 years, with the applicable conventions. First and last years are not automatically full-year deductions; alternative systems and other limits can apply.
Installment sale: some payment arrives in a later tax year
An installment sale generally has at least one payment after the tax year of sale. The method ordinarily reports eligible gain as payments arrive unless the seller elects out. The taxable gain portion is different from interest, which is ordinary income, and from return of basis. Certain sales are excluded, and ordinary-income depreciation recapture is generally recognized in the year of sale. Seller financing alone is not a tax exemption.
Section 1031: a qualifying exchange can defer gain
Like-kind exchange treatment generally concerns real property held for business or investment, not a personal residence or property held primarily for sale. For a typical deferred exchange, identify replacement property within 45 days after transferring the old property and receive it by the earlier of 180 days after transfer or the return due date, including extensions. The periods run together. Cash or other non-like-kind property can create recognized gain, and receiving the sale proceeds can defeat deferral. Domestic and foreign real estate are not like kind to each other.
Mortgage interest and points are conditional deductions
The home-mortgage-interest deduction generally requires itemizing and qualifying secured debt. How the proceeds are used matters: home-equity funds generally must buy, build, or substantially improve the home securing the loan. Debt limits and older-debt rules also apply. Points are usually deducted over the loan term, with a possible current-year deduction for qualifying main-home purchase points when the IRS tests are met. Appraisal, title, and similar service fees do not become deductible interest just because they are called points.
The 2026 SALT limit is not the old flat $10,000 shortcut
For 2026, the federal itemized deduction limit for covered state and local taxes is $40,400, or $20,200 for married filing separately. It covers the combined eligible taxes, not a separate allowance for each property. The limit is reduced above modified adjusted gross income of $505,000, or $252,500 for separate filers, but not below $10,000 or $5,000 respectively. This federal deduction is separate from Florida's homestead exemption.
A first-home IRA exception is not automatically tax-free money
A qualifying first-time homebuyer distribution can avoid the 10% additional early-distribution tax on up to $10,000 over the person's lifetime. The IRS first-home definition, permitted costs, timing, and other conditions still apply. Ordinary income tax can still be due on a traditional IRA distribution. Do not confuse relief from the additional tax with an exclusion from income.
FIRPTA withholding is based on amount realized
When a foreign person disposes of a U.S. real property interest, the buyer is generally the withholding agent. The usual withholding rate is 15% of the amount realized, not 15% of the gain. Subject to the residence-use conditions, a buyer's intended residence can qualify for no withholding when the amount realized is $300,000 or less, or a 10% rate above $300,000 through $1 million. Other exceptions and withholding certificates may apply. Withholding is not necessarily the seller's final tax liability.
These are exam-study rules and examples with stated assumptions. They do not calculate an individual return. Use the linked IRS source for the applicable tax year, eligibility tests, and exceptions.
07 / Work through the numbers
Six worked examples, with the traps explained
Set up the calculation before revealing the answer. For a portability problem, decide whether the replacement home has a higher or lower just value first.
Worked example 01
A market increase and a capped assessment
A continuously eligible homestead had a $250,000 assessed value in 2025. Its 2026 just value is $400,000. Assume no ownership change, additions, or other adjustment. What is the ordinary 2026 capped assessed value?
Show the answer and reasoning
$256,750 before exemptions.
$250,000 × 1.027 = $256,750, below the $400,000 just value. Apply the published 2.7% cap for 2026, not an automatic 3%. Then apply the exemptions for each levy. This calculation does not cap the final tax bill at a 2.7% increase.
Worked example 02
Moving to a higher-value Florida homestead
A qualifying owner moves from a homestead with $500,000 just value and $300,000 assessed value to a $600,000 homestead. Use the applicable prior-roll values and assume full eligibility, sole ownership, and no other adjustments. What is the new assessed value before exemptions?
Show the answer and reasoning
$400,000 before exemptions.
The old assessment difference is $500,000 − $300,000 = $200,000. It is below the $500,000 transfer cap. For this higher-value replacement, $600,000 − $200,000 = $400,000. Portability transfers the qualifying assessment difference, not the seller's tax bill or the old home's assessed value.
Worked example 03
Moving to a lower-value Florida homestead
Use the same eligible owner and old home values: $500,000 just value and $300,000 assessed value. This time the new homestead's just value is $400,000. What is its assessed value before exemptions?
Show the answer and reasoning
$240,000 before exemptions.
For this lower-value replacement, $400,000 ÷ $500,000 × $300,000 = $240,000. The transferred assessment benefit is $160,000, below the $500,000 cap. Subtracting the full old $200,000 difference would overstate the benefit when moving to a lower-value home.
Worked example 04
The city pays a share of the project
A sidewalk project costs $180,000. The city pays one-third; the balance is assessed uniformly across 3,000 total benefited front feet. One parcel has 75 front feet. What is that parcel's assessment?
Show the answer and reasoning
$3,000 for the parcel.
Property owners fund $180,000 × 2/3 = $120,000. Divide by 3,000 assessed front feet to get $40 per foot, then multiply by 75 feet: $3,000. The question already supplies the total benefited frontage, so do not double it or divide the charge between two street sides again. Actual assessments must satisfy the special-benefit and allocation requirements.
Worked example 05
Rental profit, principal, and depreciation
A residential rental produces $36,000 of annual income. Allowable operating expenses are $14,000 and deductible mortgage interest is $6,000. The building's depreciable basis is $275,000; land is excluded. Assume a full year of straight-line GDS depreciation and no other adjustments or limitations. What is the rental income after these deductions?
Show the answer and reasoning
$6,000 after the stated deductions.
Depreciation is $275,000 ÷ 27.5 = $10,000. Then $36,000 − $14,000 − $6,000 − $10,000 = $6,000. Mortgage principal payments would affect cash flow but are not another current deduction. First-year depreciation uses the applicable convention; this example expressly assumes a full year.
Worked example 06
Calculate gain before asking about exclusion
A home sells for $500,000 with $30,000 of selling expenses. Its adjusted basis is $335,000. What is the gain before considering any principal-residence exclusion?
Show the answer and reasoning
$135,000 of gain before any exclusion.
Amount realized is $500,000 − $30,000 = $470,000. Subtract the $335,000 adjusted basis to get $135,000. Paying off the seller's mortgage affects the closing proceeds, not this gain formula. Whether Section 121 excludes the gain is a separate eligibility question.
08 / Review every answer
All 9 real estate tax questions and answers
Open the concept you want to review. Every question, answer, wrong-choice explanation, and source is available without completing the quiz or signing in.
Study mode · Every question explained9 questions, answer reasoning, and 27 explanations of the other choices
Try each question before opening its answer. These are original practice items, not actual or recalled Pearson VUE exam questions.
Question 1 · tax-1 · January 1 and the three property values
What is the annual assessment date for Florida real property under F.S. 192.042?
Show answer and explanation
Answer B. January 1 of the tax year
Florida real property is assessed as of January 1. The property appraiser determines just value and applies the relevant assessment rules to determine assessed value. Exemptions then produce taxable value for each levy. These values can differ. January 1 is the assessment date, while the regular tax bill becomes payable later in the year.
Remember: Just value, assessed value, and taxable value are three different steps. The collector’s billing date is another event.
Why the other choices do not work
A. The closing date of the most recent sale
A sale may affect later assessment treatment, but closing is not the statewide annual assessment date.
C. The date the owner files for homestead
The date of an application does not replace January 1 as the annual assessment date.
D. December 31 of the previous year
December 31 is not the date specified by 192.042.
Sources: F.S. 192.042: January 1 assessment date · Florida DOR: property tax overview and calendar
Report a problem with tax-1Question 2 · tax-2 · 2026 non-school millage calculation
For the 2026 tax roll, a fully eligible homestead has an assessed value of $240,000. Applying only the two standard homestead exemptions and a 20-mill non-school rate, what is the tax on that portion?
Show answer and explanation
Answer D. $3,771.78
The first exemption is $25,000. For 2026, the additional non-school exemption is up to $26,411 on assessed value above $50,000. This property has enough value to use both in full. Taxable value is $240,000 − $25,000 − $26,411 = $188,589. Then $188,589 × 20 ÷ 1,000 = $3,771.78. School levies would use a different taxable value.
Remember: For an explicitly stated 2026 roll, use $26,411 for the additional exemption. Do not replace the question’s tax year with an older $50,000 total shortcut.
Why the other choices do not work
A. $4,800.00
$4,800 applies 20 mills to the full assessed value without either exemption.
B. $3,800.00
$3,800 subtracts the old $50,000 combined amount instead of the 2026 amount.
C. $4,300.00
$4,300 subtracts only the first $25,000 and misses the additional non-school exemption.
Sources: Florida DOR: 2026 additional exemption, $26,411 · F.S. 196.031: standard homestead exemptions
Report a problem with tax-2Question 3 · tax-3 · The ordinary early-payment discount schedule
Under Florida’s ordinary monthly property-tax payment schedule, what discount applies to a December payment?
Show answer and explanation
Answer A. 3%
The ordinary schedule is November 4%, December 3%, January 2%, February 1%, and March 0%. For a $4,000 bill, a December payment is $4,000 × 0.97 = $3,880. Section 197.162 also provides rules for late or corrected notices and qualifying calendar extensions; the standard monthly chart is not the only possible timing rule.
Remember: November starts at 4%. December is the next month, so it gets 3%.
Why the other choices do not work
B. 4%
4% is the ordinary November rate, not December’s rate.
C. 2%
2% is the ordinary January rate.
D. 1%
1% is the ordinary February rate.
Sources: F.S. 197.162: payment discounts and extensions · F.S. 197.333: due dates and delinquency
Report a problem with tax-3Question 4 · tax-4 · Which levies receive each homestead exemption
Which statement correctly describes Florida’s standard homestead exemptions for the 2026 tax roll?
Show answer and explanation
Answer C. The first $25,000 applies to all ad valorem levies, and up to $26,411 more applies to non-school levies on assessed value above $50,000
The first exemption removes up to $25,000 of assessed value from all ad valorem levies. The additional exemption applies only to the assessed value above $50,000 and excludes school district levies. Florida DOR set its maximum at $26,411 for 2026. A $60,000 assessment can use only $10,000 of the second band, not the full maximum. The exemption reduces taxable value, not tax dollar for dollar.
Remember: Check the value band and the levy. Up to $51,411 is not a universal exemption from every charge on the bill.
Why the other choices do not work
A. A $51,411 exemption reduces every levy, including school district levies
School levies do not receive the additional non-school exemption.
B. The $51,411 amount is a credit subtracted directly from the tax bill
An exemption reduces the value being taxed; it is not a dollar-for-dollar tax credit.
D. The additional $26,411 applies only to school district levies
The additional exemption excludes school levies, rather than applying only to them.
Sources: F.S. 196.031: standard homestead exemptions · Florida DOR: 2026 additional exemption, $26,411
Report a problem with tax-4Question 5 · tax-5 · Special benefit versus assessed property value
A city allocates the cost of a sidewalk improvement among the properties specially benefited, using the adopted benefit-based allocation. What is this charge?
Show answer and explanation
Answer B. A special assessment
A special assessment allocates the cost of a qualifying improvement to the properties specially benefited, in proportion to the benefit. Section 170.02 permits frontage or another prescribed allocation method. An ad valorem tax instead uses taxable property value and a tax rate. Standard homestead exemptions do not remove assessments for special benefits.
Remember: Special assessment: special benefit. Ad valorem tax: taxable value.
Why the other choices do not work
A. A general ad valorem tax based on taxable value
The stated charge is allocated by special benefit, not by each parcel’s taxable value.
C. A documentary stamp tax on the owners’ deeds
Documentary stamp tax concerns taxable documents and transactions, not allocation of this sidewalk project.
D. A penalty for receiving homestead exemption
Receiving homestead is not a penalty trigger, and this charge reflects a special benefit.
Sources: F.S. 170.02: allocation of special assessments · F.S. 196.031: standard homestead exemptions
Report a problem with tax-5Question 6 · tax-6 · Save Our Homes caps the assessment increase
A continuously eligible homestead has no ownership change, additions, or other special adjustment. What is the ordinary Save Our Homes limit on its annual reassessment increase?
Show answer and explanation
Answer A. The lower of 3% or the preceding year’s CPI change
The general limit is the lower of 3% or the preceding calendar year’s CPI change. Florida DOR published a 2.7% limit for 2026. The limitation applies to assessed value, not to just value, millage, or the final bill. Assessed value also cannot exceed just value. New ownership, additions, and other statutory adjustments require separate analysis.
Remember: For 2026, a normal $250,000 capped assessment becomes at most $256,750 before exemptions, assuming just value is not lower.
Why the other choices do not work
B. A fixed 10% increase every year
The homestead Save Our Homes rule is not a fixed 10% annual increase.
C. A guarantee that the entire tax bill cannot rise more than 3%
The assessment cap does not cap millage rates or the entire tax bill.
D. No limitation applies when market value increases
Market appreciation does not automatically remove the assessment limitation.
Sources: Florida DOR: 2026 Save Our Homes cap, 2.7% · F.S. 193.155 (2025 text): assessment and portability rules for the 2026 roll
Report a problem with tax-6Question 7 · tax-7 · A tax certificate is a lien, not ownership
A bidder buys a Florida tax certificate for delinquent real-property taxes. What does the certificate represent?
Show answer and explanation
Answer D. A lien for the delinquent taxes and related amounts
A tax certificate creates a lien, not title. Bidders compete by offering the lowest interest rate they will accept under the statutory process. The certificate can be redeemed. A holder may apply for a tax deed after two years have elapsed since April 1 of the certificate’s year of issuance and before cancellation, subject to the required payments and procedures. That application is a separate step, not automatic ownership.
Remember: Certificate purchase, redemption, tax deed application, and tax deed sale are different events.
Why the other choices do not work
A. Immediate title and the right to occupy the property
Buying the certificate does not give the buyer title or a right to occupy the property.
B. A promise that title automatically transfers in two years
The two-year rule permits an application under stated conditions; it does not automatically convey title.
C. An exemption from the property’s future taxes
The certificate does not exempt the parcel from future tax assessments.
Sources: F.S. 197.432: tax certificate liens and bidding · F.S. 197.502: tax deed application timing
Report a problem with tax-7Question 8 · tax-8 · Section 121 excludes gain up to the eligible limit
A single taxpayer sells a principal residence at a $220,000 gain. Assume the taxpayer meets the full Section 121 ownership, use, and look-back tests, and no depreciation or nonqualified-use limitation applies. How much gain can generally be excluded?
Show answer and explanation
Answer C. $220,000
The ordinary single-taxpayer limit is up to $250,000 of eligible gain. Since this seller has only $220,000 of gain and meets the stated conditions, the full $220,000 can generally be excluded. The basic ownership and use tests are two years within the five years ending on the sale. The ceiling does not create a deduction larger than the actual eligible gain.
Remember: Compute the gain first. An exclusion cannot exceed the gain eligible for exclusion.
Why the other choices do not work
A. $0
The stated eligibility facts support the exclusion; zero does not follow from them.
B. $100,000
$100,000 is not the ordinary Section 121 limit for this qualifying single taxpayer.
D. $250,000, even though the actual gain is lower
The maximum is a ceiling, not an automatic $250,000 subtraction regardless of gain.
Sources: IRS Topic 701: principal-residence exclusion · IRS Publication 523: home-sale gain and adjusted basis
Report a problem with tax-8Question 9 · tax-9 · Amount realized minus adjusted basis
A seller’s amount realized after selling expenses is $460,000, and the home’s adjusted basis is $335,000. What is the gain before considering any Section 121 exclusion?
Show answer and explanation
Answer A. $125,000
Gain is amount realized minus adjusted basis: $460,000 − $335,000 = $125,000. Adjusted basis generally starts with acquisition cost, adds qualifying costs and capital improvements, and subtracts applicable reductions such as allowed or allowable depreciation. The seller’s mortgage payoff affects the cash remaining at closing; it is not another deduction in this gain formula.
Remember: Gain, cash proceeds after debt payoff, and taxable gain after an exclusion are separate amounts.
Why the other choices do not work
B. $795,000
$795,000 adds the two amounts instead of subtracting adjusted basis.
C. $460,000
$460,000 is the amount realized before basis is subtracted.
D. $335,000
$335,000 is the given adjusted basis, not the difference between the two figures.
Sources: IRS Publication 523: home-sale gain and adjusted basis
Report a problem with tax-9
09 / Check the full objective
How this resource maps to the exam outline
The candidate outline has two main headings for this area. Section 18 of the Course I syllabus expands them into calculation, tax-benefit, and procedural objectives.
A. City and county property taxes, including tax math
In this resource: Valuation terms, 2026 homestead bands, millage practice, Save Our Homes, portability, exemptions, Greenbelt, appeal steps, discounts, certificate liens, and special-assessment math.
Also review: Review all personal-exemption eligibility rules and the detailed procedures for valuation challenges and tax deed sales. Closing-related documentary stamp and intangible tax calculations are covered in the computations topic.
B. Federal income taxes
In this resource: Amount realized, adjusted basis, gain, Section 121, rental income and depreciation, installment sales, Section 1031, interest and points, the 2026 SALT cap, IRA first-home rules, and FIRPTA.
Also review: Use the stated facts and tax year. Review the detailed eligibility, loss limitations, basis adjustments, and exceptions in the linked IRS sources. A nine-question sample cannot test every Section 18 objective.
DBPR sales associate exam outline, January 2025 supplies the 3% weight and the two headings. FREC Course I syllabus, effective January 1, 2023 supplies the detailed Section 18 objectives. The free set is a sample, not proof that every objective is mastered.
A quick method for your next tax question
For property-tax math, start with the year and the levy. Apply any assessment limitation before exemptions, then calculate school and non-school taxable values separately. Convert mills by dividing by 1,000.
For portability, identify the old home’s just and assessed values and the replacement home’s just value. A lower-value replacement uses a proportional rule. The benefit is an assessment difference, not a tax-bill credit.
For federal questions, separate cash received from taxable gain. Selling expenses and adjusted basis belong in the gain calculation; paying off the seller’s mortgage does not create another basis deduction. Apply any exclusion only after calculating the gain.
Questions about real estate tax practice
Frequently asked questions
How much of the Florida real estate exam covers taxes?
The published DBPR sales associate outline assigns Taxes Affecting Real Estate 3%, about three questions on the 100-question exam. The two main headings are city and county property taxes, including tax math, and federal income taxes. Section 18 of the Course I syllabus provides the detailed objectives.
How do you calculate Florida property tax from millage?
Determine assessed value, subtract the exemptions that apply to the particular levy, then multiply taxable value by mills and divide by 1,000. One mill means $1 of tax per $1,000 of taxable value. School and non-school levies can have different taxable values, so calculate each separately.
What is the standard Florida homestead exemption for 2026?
For a fully eligible homestead, the first $25,000 of assessed value is exempt from all ad valorem levies. Up to an additional $26,411 applies to assessed value above $50,000 for non-school levies. The full combined standard amount is therefore up to $51,411 for non-school levies, not for school levies or every charge on the bill.
Does a $60,000 assessment get the full $51,411 exemption?
No. The first $25,000 is exempt, but only $10,000 lies above the second band’s $50,000 starting point. Using only the standard exemptions, school taxable value is $35,000 and non-school taxable value is $25,000. You cannot subtract more value from an exemption band than the property has in that band.
What is the 2026 Save Our Homes cap?
Florida DOR published 2.7% for the 2026 assessment year. The usual rule is the lower of 3% or the preceding year’s CPI change, beginning the year after homestead exemption is received. It limits the ordinary assessed-value increase, not market value, millage, or the entire tax bill.
Does the buyer keep the seller’s homestead tax bill?
Not automatically. After an ordinary change of ownership, the next January 1 assessment generally resets to just value, subject to statutory exceptions and qualifying portability. The buyer should establish their own homestead eligibility. A seller’s unusually low assessment is not a reliable estimate of the buyer’s future tax bill.
How does Florida Save Our Homes portability work?
An eligible owner can transfer up to $500,000 of the prior homestead’s assessment difference to a new Florida homestead. Eligibility uses homestead status as of January 1 in one of the three immediately preceding years. A lower-value replacement home uses a proportional calculation. File the required transfer application with the new homestead application.
What are the early property-tax payment discounts?
The ordinary schedule is 4% in November, 3% in December, 2% in January, 1% in February, and no discount in March. Late or corrected tax notices and qualifying weekends or holidays can change the timing under 197.162. The tax collector’s notice matters for an actual payment.
When do taxes on the 2026 Florida property-tax roll become delinquent?
Ordinarily April 1, 2027. Under 197.333, a later date applies if 60 days after mailing the original tax notice ends later. Section 197.162 also provides qualifying calendar extensions. January 1, 2026 is the assessment date; it is not the delinquency date for that year’s bill.
How long do you have to challenge a property valuation?
A valuation petition is generally due to the VAB clerk by the 25th day after the property appraiser mails the TRIM notice. An informal conference is optional and does not extend that deadline. Exemption and classification denials have separate notice-based rules, so use the deadline for the issue you are challenging.
Does a Florida tax certificate transfer ownership?
No. A tax certificate is a lien. If it remains unpaid, a holder may apply for a tax deed after two years have elapsed since April 1 of the certificate’s year of issuance and before cancellation, subject to Chapter 197. The waiting period does not automatically transfer title.
Does homestead exemption remove a special assessment?
The standard homestead exemptions do not remove assessments for special benefits. Ad valorem taxes use taxable value and a millage rate; a special assessment is allocated to specially benefited properties under the applicable benefit-based method. The two charges can appear on the same bill.
Does Greenbelt classification mean no property tax?
No. It allows qualifying agricultural land to be assessed under the agricultural-use rules. The land must be used primarily for bona fide commercial agriculture and meet application requirements. Agricultural zoning alone is insufficient, and the classification is not a blanket exemption from tax.
How do you calculate gain on a home sale?
Subtract selling expenses from selling price to determine amount realized, then subtract adjusted basis. Adjusted basis reflects acquisition cost plus qualifying additions and minus applicable reductions. The mortgage payoff affects cash proceeds rather than creating another gain deduction. Determine any Section 121 exclusion after calculating gain.
What are the $250,000 and $500,000 home-sale exclusions?
A qualifying individual may generally exclude up to $250,000 of eligible principal-residence gain. Certain married couples filing jointly can exclude up to $500,000. The normal rules include ownership and use tests within five years and a separate two-year look-back rule. Depreciation, nonqualified use, and other conditions can change the eligible amount.
Can you depreciate land or deduct mortgage principal on a rental?
Land is not depreciable, and mortgage principal is not a current rental expense. Under the general depreciation system, residential rental buildings normally use 27.5 years and nonresidential real property normally uses 39 years, with applicable conventions. Deductible interest, operating expenses, and depreciation differ from cash principal payments.
What is the difference between an installment sale and a 1031 exchange?
An installment sale generally has a payment after the tax year of sale and can spread eligible gain recognition over payments. A qualifying 1031 exchange can defer gain on business or investment real property. They have different conditions and reporting rules. Neither automatically eliminates tax, and ordinary personal-residence sales do not qualify for 1031 treatment.
What is the federal SALT deduction limit for 2026?
The 2026 itemized deduction limit for covered state and local taxes is $40,400, or $20,200 for married filing separately. It is reduced above modified adjusted gross income of $505,000, or $252,500 for separate filers, but not below $10,000 or $5,000 respectively. This combined federal deduction is different from Florida’s homestead exemption.
Is FIRPTA withholding calculated on the foreign seller’s gain?
Generally it is based on amount realized, not gain. The ordinary rate is 15%, with qualifying residence-use exceptions for amounts of $300,000 or less and a 10% rate above $300,000 through $1 million. Other exceptions and withholding certificates can apply. The buyer is generally responsible for withholding, and withholding is not necessarily the final tax liability.
Are these questions free, and how can I keep preparing?
All nine questions, 27 explanations of wrong choices, the millage practice calculator, and six worked examples are free without an account. Open the Pass Florida web app or download the mobile app for more practice, missed-answer review, weak-area practice, and full-length timed exams across all 19 topics. These are original practice items, not actual or recalled Pearson VUE questions.
Sources and editorial review
Check the year behind the number.
Published by Pass Florida. Reviewed on for material applicable through .
This review checked the nine questions, every answer choice, the calculator, and the worked examples against the published DBPR outline, FREC syllabus, Florida DOR figures, governing statutes, and IRS sources.
The 3% weight comes from the January 2025 candidate booklet. Section 18 of the published Course I syllabus is effective January 1, 2023. These publication dates are not a claim that a new 2026 syllabus was issued.
The exemption and Save Our Homes figures come from DOR's January 2026 publications. The portability and agricultural-classification references use the statutory text applicable to the 2026 roll. Sections 3 to 6 of Chapter 2026-239 include amendments first applying to the 2027 roll. Those future-roll changes are not applied to these 2026 examples.
Some IRS publications currently carry a 2025 tax-year label. They are cited for the relevant continuing rules; the 2026 SALT figures come from Publication 505 for 2026. A publication's issue date and a rule's applicable tax year are different facts.
Found an error? Use the correction link under a question or send the question ID and supporting source.
- DBPR sales associate exam outline, January 2025
- FREC Course I syllabus, effective January 1, 2023
- Florida DOR: property tax overview and calendar
- F.S. 192.042: January 1 assessment date
- F.S. 196.031: standard homestead exemptions
- Florida DOR: 2026 additional exemption, $26,411
- Florida DOR: 2026 Save Our Homes cap, 2.7%
- F.S. 193.155 (2025 text): assessment and portability rules for the 2026 roll
- Chapter 2026-239, sections 3 to 6: amendments first applying to the 2027 roll
- Florida DOR: property tax exemptions and eligibility
- F.S. 196.202: widow, widower, blind, and disability exemptions
- Florida Supreme Court, Pinellas County v. Joiner (2024): limits of county tax immunity
- F.S. 193.461 (2025 text): agricultural classification for the 2026 roll
- F.S. 194.011: valuation objections and VAB petitions
- Florida DOR: petitions to the Value Adjustment Board
- F.S. 197.162: payment discounts and extensions
- F.S. 197.333: due dates and delinquency
- F.S. 197.432: tax certificate liens and bidding
- F.S. 197.502: tax deed application timing
- F.S. 170.02: allocation of special assessments
- IRS Publication 523: home-sale gain and adjusted basis
- IRS Topic 701: principal-residence exclusion
- IRS Publication 527: rental income, expenses, and depreciation
- IRS Publication 946: depreciation methods and recovery periods
- IRS Topic 705: installment sales
- IRS Form 8824 instructions: like-kind exchanges
- IRS Publication 936: mortgage interest and points
- IRS Publication 505 (2026): state and local tax deduction limit
- IRS Publication 590-B: first-home IRA distribution rules
- IRS Form 8288 instructions: FIRPTA rates and residence exceptions
Key terms for taxes affecting real estate
Review a definition, worked example, or common exam trap before your next quiz.