Annual real estate taxes are $3,600 and are unpaid at closing. Using a 360-day year and 30-day months, the closing is on 3/15, with the seller owning the day of closing excluded. What amount should be charged to the seller for taxes?
Correct Answer
C) $740
Per diem tax = $3,600 ÷ 360 = $10.00. Seller days = 74. Seller's share = $10.00 × 74 = $740.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A deed is a written legal document that conveys (transfers) ownership of real property from one party to another. It must be delivered to and accepted by the grantee to be effective.
For a deed to be valid, it must contain several essential elements including a competent grantor, identifiable grantee, consideration, legal description, granting clause, signature of the grantor, and delivery and acceptance.
Escrow is an arrangement in which a neutral third party holds documents, funds, or other items on behalf of the buyer and seller until all conditions of the transaction are met.
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