Section 876 IAC 2-12-12 - Real estate mathematicsAuthority: 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).(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.Indiana Real Estate Commission; 876 IAC 2-12-12; filed Dec 1, 1989, 5:00 p.m.: 13 IR 665; errata filed Jun 2, 1998, 11:33 a.m.: 21 IR 3940; readopted filed Jun 29, 2001, 9:56 a.m.: 24 IR 3824; readopted filed Jul 19, 2007, 12:57 p.m.: 20070808-IR-876070067RFA