A buyer purchases a duplex for $275,000 and obtains a purchase money mortgage of $220,000 plus a separate home equity line of credit for $30,000. What is the total documentary stamp tax due on all taxable instruments?
Correct Answer
B) $2,030.00
Correct: Deed tax: $275,000 ÷ $100 × $0.70 = $1,925. Home equity line tax: $30,000 ÷ $100 × $0.35 = $105. Total: $1,925 + $105 = $2,030. The purchase money mortgage is exempt. Why not A: This omits the tax on the home equity line of credit. Why not C: This incorrectly includes tax on the purchase money mortgage. Why not D: This uses an incorrect calculation method.
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