An Illinois closing uses the prior year's taxes of $5,200.00 and a 365-day calendar year for proration. The seller is responsible for 90 days of the tax year. What is the seller's tax proration credit to the buyer?
Correct Answer
A) $1,282.19
Under standard Illinois closing practice, taxes are prorated using the prior year's tax bill when the current year's bill is not yet available, and a 365-day year is used. The daily tax rate is $5,200 ÷ 365 = $14.2466/day. Multiplied by 90 days, the seller's credit is $14.2466 × 90 = $1,282.19. The seller receives a credit because property taxes are paid in arrears in Illinois — the seller occupied the property for those 90 days but has not yet paid taxes covering that period.
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