Annual real estate taxes are $9,000 and are unpaid at closing. Using a 360-day year, closing is on September 21, and the seller owns the day of closing. What is the seller's tax proration?
Correct Answer
A) $6,525
Per diem = $9,000 / 360 = $25. Seller days = Jan-Aug (8 x 30 = 240) + 21 Sep = 261. Seller owes $25 x 261 = $6,525.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A transfer tax is a tax imposed by state, county, or local government on the transfer of real property from one owner to another. It is typically based on the sale price or a flat rate per dollar of consideration.
An abstract of title is a condensed history of all recorded documents and proceedings that affect the title to a specific parcel of real property. It is a summary, not a guarantee, of title condition.
Actual notice means a person has direct, personal knowledge of a fact or interest in real property. This can come from being told, seeing something firsthand, or any form of direct awareness.
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