A residential property in Nashville sells for $347,500 at a foreclosure auction. The buyer must pay Tennessee's realty transfer tax at the rate of $0.37 per $100 of consideration (or fraction thereof). How much transfer tax is owed on this transaction?
Correct Answer
A) $1,285.75
Step 1: Determine the number of $100 units, rounding up any fraction to the next whole $100. $347,500 ÷ $100 = 3,475 (exactly, no fraction). Step 2: Multiply by the Tennessee transfer tax rate. 3,475 × $0.37 = $1,285.75. The transfer tax owed is $1,285.75. Since $347,500 divides evenly by $100, no rounding up is required.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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