Five regulator-facing modules complete the instructional treatment of subjects identified in the 90-hour syllabus crosswalk. They supplement—without adding to or renumbering—the approved 38-chapter curriculum.
5Supplemental modules
9Instruction hours
25Knowledge checks
Approval control: These modules are a submission-ready working draft, not a claim of Commission approval. Online attendance, interaction, identity, examination, and credit-hour treatment still require written Commission direction.
Supplement 01 · 60 minutes
Federal Income Taxation of Real Estate
Build practical literacy in basis, gain, residence-sale rules, rental-property depreciation, deductible versus capital costs, and broker scope without turning the licensee into a tax adviser.
Learning objectives
Calculate a simplified adjusted basis and realized gain
Distinguish repairs, capital improvements, and selling expenses
Recognize the ownership-and-use framework for a principal-residence exclusion
Identify when a tax professional must take over
Timed instructional plan
Minutes
Learning activity
Completion evidence
10
Instructor-guided concept map: federal income, basis, gain, loss, exclusion, deduction, credit, and depreciation.
Student completes a vocabulary sorting check.
15
Worked example: purchase cost, qualifying improvements, selling expenses, amount realized, and adjusted basis.
Student calculates a simplified gain worksheet.
15
Principal-residence and rental-property comparison, including business/rental use and depreciation recapture risk.
Student classifies four ownership scenarios.
10
Broker-scope decision lab: facts a broker may explain versus individualized tax conclusions requiring referral.
Student drafts a compliant referral response.
10
Five-question knowledge check and answer review.
Recorded completion and remediation prompt.
60
Total instructional minutes
National concept
Amount realized is generally the value received, reduced by qualifying selling expenses; gain is measured against adjusted basis.
Capital improvements generally add value, prolong useful life, or adapt property to a new use; ordinary repairs generally maintain current condition.
A principal-residence exclusion depends on detailed federal eligibility rules. Rental or business use, depreciation, prior exclusions, and special circumstances can change the result.
A personal-use home sold at a loss generally does not create a deductible capital loss.
Indiana law spotlight · verification control
This is a federal-tax module. Indiana income-tax consequences, county property-tax treatment, and transaction-specific advice remain outside the lesson unless separately sourced and verified. Students are taught to use the current IRS materials and refer clients to a qualified tax professional.
Licensing exam guidance
On a licensing exam, separate the arithmetic from tax eligibility. First determine amount realized and adjusted basis; then apply only the exclusion facts the question supplies.
Practical brokerage application
A broker may organize closing records and explain commonly used terms, but should not promise a deduction, exclusion, or tax outcome. Document the referral when a client needs individualized advice.
Applied decision scenario
The remodeled kitchen: A seller asks whether every dollar spent before listing reduces taxable gain. The file shows a full kitchen replacement, routine painting, and the brokerage commission.
PASS FIRST response: Classify the kitchen as a potential basis-increasing improvement, painting as a likely repair unless part of a larger improvement, and the commission as a potential selling expense. Do not determine the return treatment; provide records and refer the seller to a tax professional using current IRS guidance.
Knowledge check
1. Which item most commonly increases a home's adjusted basis?
A. A new permanent room addition
B. Routine lawn mowing
C. Monthly utility bills
D. Homeowner association notices
Answer: A. A permanent addition is a capital improvement. Routine maintenance and carrying costs ordinarily are not basis additions.
2. A broker is asked to guarantee that a seller qualifies for the home-sale exclusion. What is the best response?
A. Guarantee it if the seller owned the home two years
B. Explain the general framework and refer the seller for tax advice
C. Calculate the tax and add it to the listing agreement
D. Ignore the question because taxes never affect real estate
Answer: B. Eligibility can depend on use, prior exclusions, rental use, depreciation, and exceptions. A broker should explain general concepts and make a qualified referral.
3. In a simplified gain calculation, the amount realized is compared with what?
A. Original loan balance
B. Tax assessment
C. Adjusted basis
D. Replacement cost
Answer: C. Gain or loss is measured by comparing amount realized with adjusted basis—not the mortgage, assessment, or replacement cost.
4. Which statement about a loss on the sale of a personal-use principal residence is generally correct?
A. It is always deductible
B. It becomes a property-tax credit
C. It is added to the next home's basis
D. It generally is not deductible
Answer: D. The IRS generally treats a loss on personal-use property, including a principal residence, as nondeductible.
5. Why should a seller preserve improvement invoices and closing records?
A. They can support basis and amount-realized calculations
B. They replace the deed
C. They guarantee an exclusion
D. They establish market value for every purpose
Answer: A. Contemporaneous records can support how basis and selling costs are calculated, but they do not replace title documents or guarantee a tax result.
Teach risk transfer, common property-policy concepts, coverage limits and exclusions, loss-settlement questions, lender requirements, and the difference between insurance and a service-contract warranty.
Learning objectives
Distinguish hazard, liability, and loss-of-use concepts
Compare replacement-cost and actual-cash-value language
Explain why policy forms, endorsements, deductibles, and exclusions matter
Separate homeowner insurance from a home warranty
Timed instructional plan
Minutes
Learning activity
Completion evidence
10
Risk and policy vocabulary: peril, hazard, premium, deductible, limit, exclusion, endorsement, and claim.
Student completes a matching exercise.
15
Policy-reading lab using a fictional declarations page and coverage summary.
Student identifies limit, deductible, named insured, and endorsement questions.
10
Replacement cost, actual cash value, coinsurance, and insurable-interest examples.
Student compares two loss-settlement outcomes.
10
Home warranty/service contract versus insurance; transaction negotiation and disclosure limits.
Student completes a side-by-side classification.
15
Indiana consumer-resource exercise and five-question knowledge check.
Recorded completion and referral decision.
60
Total instructional minutes
National concept
A property policy is a contract: coverage depends on the form, declarations, endorsements, limits, deductibles, conditions, and exclusions.
Replacement-cost language generally looks to the cost to repair or replace without depreciation, while actual cash value commonly reflects depreciation; the actual policy controls.
A home warranty commonly addresses specified systems or appliances under a service contract. It is not a substitute for homeowner insurance and may contain fees, caps, exclusions, and maintenance requirements.
A lender's insurance requirement protects collateral interests; it does not prove the owner's needs are fully covered.
Indiana law spotlight · verification control
Insurance products and producers are regulated separately from real estate brokerage. Students must direct coverage, claim, company, and producer questions to a licensed insurance professional or the Indiana Department of Insurance. Product-specific claims require the actual contract.
Licensing exam guidance
Watch for absolute words such as “all” and “guaranteed.” Insurance questions are usually resolved by identifying the risk, the contract provision, and the party whose interest is protected.
Practical brokerage application
Ask whether the buyer has confirmed insurability early, especially when condition, prior loss, flood, roof, vacancy, or unusual construction issues appear. Never describe a policy or warranty as comprehensive without reviewing the actual terms through the proper professional.
Applied decision scenario
The older roof: A buyer loves a home with an aging roof and assumes a home warranty will pay for replacement after closing.
PASS FIRST response: Explain that a warranty and homeowner policy serve different functions and both are contract-specific. Encourage the buyer to inspect the roof, obtain insurance quotes, read warranty exclusions and caps, and consult licensed providers before the contingency deadline.
Knowledge check
1. Which document most directly shows a policy's named insured, limits, and deductible?
A. Purchase agreement
B. Declarations page
C. Deed
D. Appraisal
Answer: B. The declarations page summarizes key policy-specific information, though the full policy and endorsements control coverage.
2. Actual cash value most commonly differs from replacement cost because it considers what?
A. Commission
B. Loan points
C. Depreciation
D. Title defects
Answer: C. Actual cash value commonly reflects depreciation; exact loss settlement depends on policy language.
3. A home warranty is best described as what?
A. A deed covenant
B. A title policy
C. A lender's appraisal
D. A service contract for specified items under stated terms
Answer: D. A home warranty is generally a service contract with defined covered items, exclusions, fees, and limits—not title or homeowner insurance.
4. What is the safest broker response when a buyer asks whether a roof will be covered?
A. Refer the buyer to the actual insurer or warranty provider and written terms
B. Promise coverage if the roof passes inspection
C. State that every standard policy covers it
D. Remove the inspection contingency
Answer: A. Coverage is contract- and fact-specific. The broker should flag the issue and direct the buyer to the licensed provider and written contract.
5. Why may a lender require property insurance?
A. To set the sales price
B. To guarantee every owner loss
C. To replace title evidence
D. To protect its collateral interest
Answer: D. The lender seeks to protect the collateral securing its loan. That requirement does not guarantee complete coverage for the owner.
Give brokers a practical building-systems vocabulary, pattern-recognition skills, and a disciplined referral method—without training them to perform engineering, code, environmental, or home inspections.
Learning objectives
Trace loads from roof to foundation
Identify major structural, enclosure, mechanical, electrical, and plumbing systems
Recognize common architectural forms without promising a precise style
Distinguish site-built, modular, and HUD-code manufactured housing
Connect energy and moisture observations to appropriate inspections
Timed instructional plan
Minutes
Learning activity
Completion evidence
20
Site, foundation, structure, and load-path lesson with labeled building diagram.
Student traces three loads and identifies settlement red flags.
Student writes an accurate, nonabsolute listing description.
20
Construction methods: site-built, panelized, modular, and manufactured housing; permanent chassis and HUD label concepts.
Student completes a comparison grid.
20
Energy and building-science lab: air, heat, and moisture movement; insulation, ventilation, windows, and equipment efficiency.
Student diagnoses three comfort complaints without exceeding broker scope.
15
New construction, permits, certificates, plans, warranties, punch lists, and documentation controls.
Student sequences a new-construction file review.
10
Five-question knowledge check and remediation.
Recorded completion and review assignment.
180
Total instructional minutes
National concept
A building's load path carries roof, floor, wall, occupant, wind, and snow loads through structural members to the foundation and soil.
The enclosure manages water, air, heat, and vapor. Roof drainage, flashing, grading, penetrations, and ventilation often matter more than cosmetic finishes.
Mechanical, electrical, and plumbing observations are signals—not diagnoses. Age, capacity, condition, permits, and safety require qualified evaluation.
Manufactured homes built in the United States after June 15, 1976 are subject to federal HUD construction and safety standards and carry certification labels on transportable sections.
Indiana law spotlight · verification control
Local building, zoning, permit, floodplain, septic, well, and certificate requirements vary by jurisdiction and property. No visual lesson establishes code compliance. Students must verify the correct local authority and refer to qualified inspectors or specialists.
Licensing exam guidance
Identify function before vocabulary: foundation supports, framing carries load, flashing redirects water, insulation slows heat flow, ventilation manages air and moisture. Avoid choosing a cosmetic answer for a system problem.
Practical brokerage application
Describe observable facts accurately, avoid diagnosing hidden causes, preserve inspection rights, recommend qualified specialists, and document material information and referrals.
Applied decision scenario
The fresh basement paint: A basement wall is freshly painted, the downspout ends at the foundation, and the floor has a white mineral deposit.
PASS FIRST response: Do not declare the basement dry or defective. Record the observable conditions, recognize possible moisture indicators, recommend an appropriate inspection, and preserve the buyer's investigation and negotiation deadlines.
Knowledge check
1. Which component is intended to redirect water at a roof or wall intersection?
A. Joist
B. Flashing
C. Footing
D. Subfloor
Answer: B. Flashing helps direct water away from joints and penetrations. A joist, footing, and subfloor primarily serve other functions.
2. A broker sees a horizontal foundation crack. What is the best next step?
A. Diagnose normal settlement
B. Estimate repair cost
C. Recommend evaluation by a qualified professional
D. Conceal it until inspection
Answer: C. The broker should identify and document the observation, not diagnose structural significance or price a repair outside their expertise.
3. What feature is central to the federal definition of a manufactured home?
A. A masonry chimney
B. A basement
C. A slate roof
D. A permanent chassis supporting transportability
Answer: D. HUD describes manufactured housing as built on a permanent chassis; post-June 15, 1976 sections must carry certification labels.
4. Which sequence best describes a basic gravity load path?
A. Roof or floor to framing to foundation to soil
B. Soil to paint to window to roof
C. Plumbing to siding to footing to attic
D. Insulation to trim to appliance to slab
Answer: A. Gravity loads move from occupied and exterior assemblies through structural framing to the foundation and supporting soil.
5. Why should a listing avoid an unsupported claim that a mixed-style home is a 'true historic Colonial'?
A. Architecture may never be mentioned
B. Style claims should match observable, supportable facts
C. All old homes are bungalows
D. Only appraisers can use adjectives
Answer: B. Brokers can use architectural vocabulary, but should avoid absolute or provenance claims that the evidence does not support.
Help real estate brokers recognize when an ownership or financing opportunity may also involve a security, understand core federal frameworks, and stop before unlicensed solicitation or advice.
Learning objectives
Distinguish direct ownership from pooled or passive investment interests
Recognize the Howey investment-contract factors
Identify REIT and crowdfunding risk signals
Apply a broker-scope stop-and-refer protocol
Timed instructional plan
Minutes
Learning activity
Completion evidence
10
Direct real estate versus securities: economic reality, labels, and common structures.
Student classifies six offerings.
15
Securities Act of 1933, Exchange Act of 1934, registration, disclosure, antifraud, and exemptions at a survey level.
Student completes a law-purpose map.
15
Howey analysis workshop using a pooled renovation venture.
Student applies the four-factor issue-spotting sequence.
10
REITs, private placements, syndications, and regulated crowdfunding pathways.
Student identifies liquidity and disclosure questions.
10
Five-question knowledge check and scope-of-practice remediation.
Recorded completion and referral decision.
60
Total instructional minutes
National concept
A real-estate-related arrangement can be a security when its economic reality fits a recognized securities category or an investment contract.
The Howey framework asks whether there is an investment of money in a common enterprise with a reasonable expectation of profits derived from the essential managerial efforts of others.
Publicly traded, non-traded, and private REITs differ in liquidity, valuation transparency, disclosures, and access.
Registration or filing does not mean the SEC approves or guarantees an offering.
Indiana law spotlight · verification control
Real estate licensure does not itself authorize securities brokerage, offering advice, or compensation for securities sales. Any specific offering, exemption, solicitation, referral fee, or dual-license question requires review by qualified securities counsel and the relevant regulators.
Licensing exam guidance
When an investor supplies money but relies primarily on a promoter or manager to create profits, treat securities law as a major issue. The name placed on the deal is not controlling.
Practical brokerage application
Stop promotional activity when securities indicators appear. Do not promise returns, minimize risk, distribute unreviewed offering materials, or accept transaction-based compensation without confirmed authority.
Applied decision scenario
The passive flip club: A developer asks a broker to recruit ten passive investors for a pooled house-flipping venture. The developer will select, renovate, manage, and sell every property, and offers the broker a percentage of funds raised.
PASS FIRST response: Recognize strong investment-contract indicators and transaction-based compensation risk. Do not solicit investors or accept compensation based only on a real estate license. Escalate to qualified securities counsel and appropriately licensed professionals.
Knowledge check
1. Which fact most strongly suggests a possible investment contract?
A. A buyer occupies a purchased home
B. An investor relies on a promoter's essential managerial efforts for profit
C. A tenant pays monthly rent
D. An owner hires a painter
Answer: B. Reliance on another's essential managerial efforts for an expected profit is a central Howey issue.
2. What does SEC registration of an offering mean?
A. The investment cannot lose value
B. The return is federally guaranteed
C. Required filing does not equal SEC approval or endorsement
D. The offering is suitable for every buyer
Answer: C. Registration or qualification is not an endorsement, guarantee, or suitability finding.
3. Which is a key risk of many non-traded REITs?
A. Automatic title failure
B. No real estate exposure
C. Guaranteed criminal liability
D. Limited liquidity and less transparent share value
Answer: D. Investor.gov highlights illiquidity and valuation transparency as important non-traded REIT risks.
4. A real estate broker is offered a percentage of capital raised for a passive syndication. What is the safest action?
A. Stop and obtain securities-law and licensing review
B. Accept because the assets are buildings
C. Call it a marketing fee and proceed
D. Promise investors a minimum return
Answer: A. The asset type and fee label do not eliminate securities issues. Transaction-based compensation and solicitation require specialized review.
5. Under Howey, the analysis focuses primarily on what?
A. The color of the contract
B. The transaction's economic reality
C. The county assessment
D. The deed's page count
Answer: B. Courts and regulators examine the economic reality and the complete circumstances, not merely the label.
Create a dated, replaceable annual-update block that trains students to find controlling Indiana sources, distinguish law from local practice, and respond to current Commission, market, geographic, and transaction risks.
Learning objectives
Use the official Indiana authority hierarchy
Track Commission and PLA operational changes
Distinguish statewide rules from local requirements
Analyze geographic risks without steering or unsupported claims
Document an annual content-refresh decision
Timed instructional plan
Minutes
Learning activity
Completion evidence
20
Authority hierarchy: Indiana Code, IAC, Commission orders/minutes, PLA instructions, forms, and local ordinances.
Student ranks sources by authority and date.
25
Dated Commission/PLA update lab using current official announcements and meeting records.
Student creates a source-linked change brief.
20
Current statewide practice issue: written listing and buyer-agency agreements and implementation controls.
Student identifies agreement timing and file-review questions without relying on memory.
20
Licensing operations update: Pearson VUE scheduling and MyLicense One reassignment workflow.
Student routes three applicant/licensee tasks to the correct official system.
25
Indiana geography: urban, suburban, rural, agricultural, lake, floodplain, mine-subsidence, well, septic, and access considerations.
Student builds a property-specific due-diligence checklist.
Student selects the correct local office for six questions.
20
Fair-housing-safe neighborhood and market communication; objective sources versus demographic steering.
Student rewrites four risky statements.
20
Current market and technology risks: wire fraud, cyber hygiene, AI-generated content, remote transactions, and vendor controls.
Student completes an incident-response sequence.
10
Five-question knowledge check and annual-update attestation.
Recorded completion, source date, and remediation.
180
Total instructional minutes
National concept
Current-topic instruction must identify the source, effective date, scope, and whether the material is law, agency procedure, professional guidance, or market practice.
Geographic competence means asking property-specific questions and consulting authoritative records; it does not justify demographic generalizations or steering.
Local rules can differ across Indiana jurisdictions. A state license does not make one county's zoning, septic, flood, or rental process universal.
Cybersecurity and wire-fraud prevention require independent verification using trusted contact information, documented procedures, and rapid escalation.
Indiana law spotlight · verification control
Annual refresh required before each submitted or delivered course cycle. As of the module review date, PLA announces Pearson VUE exam scheduling, MyLicense One reassignment processing, and Indiana's written listing and buyer-agency agreement requirement. Each item must be rechecked against current official authority before instruction.
Licensing exam guidance
For an Indiana-specific question, identify whether it asks about state law, Commission rule, PLA process, or local regulation. Do not substitute brokerage custom, MLS policy, or another state's rule.
Practical brokerage application
Use a repeatable verification log: student or broker question, property and jurisdiction, official source, effective date, person contacted if needed, conclusion, and follow-up deadline.
Applied decision scenario
One transaction, five jurisdictions: A rural property is marketed with a private well, septic system, creek, detached dwelling, and shared lane. The buyer asks whether a home business and short-term rental are allowed.
PASS FIRST response: Build a jurisdiction map before answering: zoning and use, building permits, health/septic records, water testing, flood/drainage data, recorded access documents, lender and insurer requirements, and any local rental rules. State only verified facts and avoid predicting approvals.
Knowledge check
1. Which source ordinarily provides the strongest direct text for an Indiana administrative rule?
A. A brokerage blog
B. An online discussion
C. The official Indiana Administrative Code
D. A neighboring state's handbook
Answer: C. The official IAC is the direct rule text. Secondary sources may help locate an issue but should not replace controlling authority.
2. A broker knows one county's septic process. What should the broker do for a property in another county?
A. Assume the process is statewide
B. Use the old county's form
C. Tell the buyer septic is unregulated
D. Verify requirements with the correct local authority
Answer: D. Local health, permitting, and records processes can differ. Verification must be property- and jurisdiction-specific.
3. Which neighborhood statement is safest and most useful?
A. Provide objective sources and let the client evaluate them
B. Describe the residents by protected-class composition
C. Steer the client toward a neighborhood that 'fits'
D. Guarantee future school performance
Answer: A. Objective, client-directed research avoids steering and unsupported promises. Protected-class composition should not drive a broker's recommendation.
4. Why does this module carry a review date?
A. Dates make every statement permanent
B. Only market prices change
C. The Commission prohibits source links
D. Current rules, processes, and risks can change
Answer: D. A current-topics module must be refreshed because statutes, rules, agency processes, forms, technology risks, and market conditions evolve.
5. A client emails new wire instructions. What is the best response?
A. Send immediately to avoid delay
B. Reply with account credentials
C. Independently verify through a trusted known contact method
D. Post the instructions in a group chat
Answer: C. Unexpected wire changes are a major fraud signal. Independent verification through previously trusted contact information is the safer control.
