An Illinois purchase contract states that real estate taxes will be prorated on a daily basis using the prior year's tax bill. The prior year's taxes were $6,200.00 and the closing date is February 15, 2026. Under standard Illinois proration practice, where the closing day is credited to the buyer, how much tax credit should the seller give the buyer?
Correct Answer
A) $764.38
Under standard Illinois proration practice, the closing day is credited to the seller, meaning the buyer is credited for days January 1 through February 14 — 45 days. The daily rate is $6,200 ÷ 365 = $16.9863. Multiplied by 45 days: $16.9863 × 45 = $764.38. Because Illinois taxes are paid in arrears, the seller owes the buyer a credit covering the portion of the year the seller owned the property.
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Key Terms:
Related Concepts
A bargain and sale deed implies that the grantor holds title and possession of the property but does not include warranties against encumbrances or title defects.
The chain of title is the sequential history of all transfers of ownership for a specific property, from the original source (typically a government patent or grant) to the present owner. An unbroken chain is essential for marketable title.
The closing process, also called settlement, is the final step in a real estate transaction where documents are signed, funds are disbursed, and title is officially transferred from the seller to the buyer.
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