A homeowner's annual property tax is $6,570. The property closes on April 10 and taxes are paid in arrears. Using a 365-day year with the day of closing belonging to the buyer, how much does the seller owe in prorated taxes at closing?
Correct Answer
D) $1,782
Seller owns Jan 1 through Apr 9 = 31 + 28 + 31 + 9 = 99 days. Daily rate = $6,570 / 365 = $18/day. Seller owes = 99 × $18 = $1,782.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Monthly interest is the portion of the total annual interest that is paid or accrued each month.
Net operating income (NOI) is the annual income generated by an income-producing property after deducting operating expenses, but before deducting mortgage payments, income taxes, and depreciation.
Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses.
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