North Carolina Taxes & Insurance — Printable Practice Pack

Answer key & explanations

1. 1. D — The excise tax, also known as the transfer tax, is paid by the seller at closing, at a rate of $1 per $500 of value.
2. 2. D — The seller is responsible for paying the excise tax, which is $1.00 per $500 of value, at closing.
3. 3. D — The attorney-conducted closing is to facilitate the transfer of ownership and ensure compliance with state laws, including the preparation of documents and the disbursement of funds.
4. 4. A — The buyer is responsible for paying the property tax, although the seller may be responsible for a portion of the tax for the current year, depending on the closing date.
5. 5. D — The property owner is responsible for paying the ad valorem property tax in North Carolina.
6. 6. A — In North Carolina, real estate closings are conducted by a licensed attorney.
7. 7. D — Title insurance protects against losses due to title defects, such as errors in public records or unknown liens.
8. 8. D — The attorney conducting the closing is responsible for ensuring that the seller has paid the excise tax.
9. 9. C — The primary purpose of homeowners insurance is to protect the property from damage or loss, such as from fire, theft, or natural disasters.
10. 10. A — The excise tax in North Carolina is paid by the seller at closing, which reduces the seller's net proceeds from the sale.
11. 11. D — The excise tax is calculated at $1 per $500 of the property's value.
12. 12. C — The purpose of title insurance is to ensure clear title to the property, protecting the buyer from potential title defects.
13. 13. C — The excise tax is a revenue-generating tax paid by the seller at closing, at a rate of $1 per $500 of value.
14. 14. D — Flood insurance is typically required for properties located in a flood zone, as it provides coverage for damage caused by flooding.
15. 15. C — Title insurance ensures that the buyer has clear ownership of the property and protects against any defects or issues with the title.
16. 16. C — In North Carolina, real estate closings are conducted by a licensed attorney, who also reviews the title insurance.
17. 17. A — The buyer is responsible for paying the property tax in North Carolina, although the seller may be responsible for the tax up to the date of closing.
18. 18. C — In North Carolina, closings are conducted by a licensed attorney, who ensures that all documents are properly executed and recorded.
19. 19. C — The excise tax in North Carolina is $1.00 per $500 of value, making it a proportionate tax based on the property's value.
20. 20. C — The excise tax is a revenue-generating mechanism for the state, with the seller paying $1.00 per $500 of value at closing.