Indiana Administrative Code › Title 876 - INDIANA REAL ESTATE COMMISSION › Article 2 - REAL ESTATE COURSES AND LICENSING REQUIREMENTS FOR BROKERS AND SALESPERSONS › Rule 12 - Real Estate Broker Course; Outline › Section 12-12 - Real estate mathematics

Current through July 10, 2024
Authority: IC 25-34.1-2-5
Affected: IC 25-34.1-5
Sec. 12.
(a) The
				competency and instructional level for real estate mathematics is Level 1 or
				Level 2. This section is included only for the purpose of listing in one (1)
				place the types of applied real estate mathematics calculations which students
				should master in this course. As a practical matter, it will be necessary to
				cover most of these various mathematics calculations at various points during
				the course. It is not feasible to cover all real estate mathematics required in
				the course as a separate subject area, although instructors may wish to have a
				"review" on real estate mathematics near the end of the course.
(b) It should be noted that the mathematics
				listed below
[subsections (c) through (d)]
is applied real
				estate mathematics. This course outline
[this rule]
does not
				provide for instruction in basic mathematics such as addition, subtraction,
				multiplication, division, decimals, fractions, or percentages. It is presumed
				that entering students possess these elementary mathematics skills. Should it
				be necessary to provide students with remedial instruction in basic
				mathematics, schools must include additional time for such instruction over and
				above the minimum time required for this course.
(c) Instructors will note that competency and
				instructional levels are not assigned to topics in this section. Since all the
				topics (types of mathematics calculations) listed should be "mastered" by
				students, it is considered obvious that a working knowledge of these topics is
				required. Students are still expected to have a working knowledge of the
				mathematics associated with such topics.
(d) The following are concepts of mathematics
				calculations:
(1) Brokerage commissions. (Do
				not devote class time to this topic since it is covered adequately in the
				salesperson course.)
(2) Estimating
				net to seller after brokerage fee and other closing expenses are paid (when
				setting listing price or considering an offer).
(3) Area calculations including the
				following:
(A) Conversion of acreage to
				square footage and vice versa.
(B)
				Calculation of square footage of variously shaped buildings and parcels of land
				with straight-line sides, including irregularly shaped parcels and buildings
				(involves application of formulas for calculating the area of squares,
				rectangles, trapezoids, and right triangles).
(4) Property taxes.
(5) Prorations at closing. (See section on
				"Closing Real Estate Transactions"
[section 8 of this rule]
for proration methods and items requiring proration.)
(6) Preparation of closing statements. (Note:
				broker license examination candidates will be required to work an entire
				closing statement (for both buyer and seller) based on a fact situation and
				also may be required to work closing statement "mini" problems where, based on
				summarized data, they are asked to calculate the "net proceeds due seller" or
				the "balance due from buyer".)
(7)
				Income tax calculations including the following:
(A) Homeownership as follows:
(i) Calculating "deductions".
(ii) Calculating "adjusted basis".
(iii) Calculations related to the
				determination of "gain/loss realized".
(iv) Calculations related to the "deferral of
				gain" in various situations and to the "exclusion of gain" by taxpayers over
				age fifty-five (55)".
(B) Real estate investments as follows:
(i) Calculating net taxable income/loss on
				real estate operations.
(ii)
				Calculating gain/loss on sale of investment real estate.