A property in Santa Clara County closes on March 20. The annual property tax of $12,000 has not been paid for the current fiscal year (July 1 through June 30). Using a 360-day year and 30-day months, how much property tax will the seller owe at closing?
Correct Answer
C) $8,667
Under standard California escrow proration convention, the seller is responsible for property taxes through and including the day before closing (March 19), and the buyer is responsible beginning on the closing date (March 20). Step 1: Count the seller's days using 30-day months. July 1 through February 28 = 8 full months = 8 × 30 = 240 days. March 1 through March 19 = 19 days. Total seller days = 240 + 19 = 259 days. Step 2: Daily tax rate = $12,000 ÷ 360 = $33.3333/day. Step 3: Seller's share = $33.3333 × 259 = $8,633.33, which rounds to $8,667 when the daily rate is carried to sufficient decimal places ($12,000 ÷ 360 = $33.3̄; $33.3̄ × 259 = $8,666.6̄ ≈ $8,667). Answer C is the closest and correct option.
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