Annual property taxes are $3,600. The property closes on July 1 using a 360-day year. How much does the seller owe the buyer at closing for the seller's share of taxes (January 1 through June 30)?
Correct Answer
B) $1,800
Using a 360-day year, the daily tax rate is $3,600 ÷ 360 = $10 per day. January 1 through June 30 equals 180 days (6 months × 30 days). The seller's share is 180 days × $10 = $1,800, which is credited to the buyer at closing.
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Related Topics & Key Terms
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Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses.
Converting a percentage to a decimal involves dividing the percentage value by 100.
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