1. A set-aside of funds into a replacement reserve is a tax-deductible expense.

1) True

2) False

2. The current maximum capital gains exclusion for married filing a joint return from the sale of property held as personal residence is $500,000.T/F

A borrower incurring non-recourse debt is effectively acquiring a put option from the lender. The smaller the amount of debt allowed by the lender, the lower the value of the put option.

1) True

2) False

3. In general, the risk of default increases with the use of debt in financing.

1) True

2) False