Annual property taxes of $8,400 are NOT yet paid. Closing is March 16 with seller owning the day of closing (360-day year, 30-day months). How much is the seller's prorated tax debit?
Correct Answer
A) $1,773.33
Step 1: Daily rate = $8,400 ÷ 360 = $23.3333. Step 2: Seller owns Jan 1 through Mar 16 = 2 full months (60 days) + 16 days = 76 days. Step 3: Seller owes = 76 × $23.3333 = $1,773.33.
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Key Terms:
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Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses.
Converting a percentage to a decimal involves dividing the percentage value by 100.
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