Annual property taxes are $3,600. The closing occurs on April 1 using a 360-day year. What is the seller's proration debit at closing?
Correct Answer
B) $900
The seller owes taxes for January 1 through March 31 (90 days). Using a 360-day year: $3,600 ÷ 360 = $10 per day. 90 days × $10 = $900 seller debit.
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Related Topics & Key Terms
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Net operating income (NOI) is the annual income generated by an income-producing property after deducting operating expenses, but before deducting mortgage payments, income taxes, and depreciation.
Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses.
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