Sandra is selling her home in Dover, Delaware for $280,000. The transaction is subject to the Delaware state realty transfer tax of 2.5% plus a local transfer tax of 1.5%. Under the standard split convention, how much will Sandra (the seller) be required to pay in total realty transfer taxes at closing?
Correct Answer
B) $5,600
Step 1: Calculate the combined transfer tax rate: 2.5% (state) + 1.5% (local) = 4.0% combined rate. Step 2: Calculate total transfer tax on the full purchase price: $280,000 × 4.0% = $11,200 total transfer tax. Step 3: Apply the standard 50/50 split convention between buyer and seller: $11,200 ÷ 2 = $5,600. Sandra's share as the seller is $5,600.
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