California Real Estate Practice Exam

On a property, a pump and well would be considered:

1. An improvement

2. Both a and b

3. None of the above

4. Taxable as capital gains

The correct answer is: An improvement

A pump and well on a property would be considered an improvement because they enhance the utility and value of the property. Improvements refer to any additions or enhancements that serve a specific purpose, such as providing water access through a well or facilitating irrigation or other functions through a pump. These structures are essential for making the land usable and productive, particularly in rural or agricultural settings. The inclusion of both options A and B in the answer hints at another perspective, but since a pump and well primarily reflect a physical enhancement to the property, identifying them strictly as improvements captures their purpose and contribution to the overall value of the property. They are not typically categorized as taxable capital gains unless they are sold or disposed of, thus making that aspect less relevant in this context.