Property taxes on a Texas home are $6,000 per year. The sale closes on April 1. How much does the seller owe for prorated taxes?
Question & Answer
Review the question and all answer choices
$1,500
$4,500
B ($4,500) represents nine months of taxes, which would be the buyer's prorated share for the remainder of the year (April through December), not the seller's share for the period they owned the property.
$3,000
C ($3,000) represents exactly six months of taxes, which would be correct only if the closing occurred on July 1; it does not reflect the actual three-month ownership period from January through March.
$2,000
D ($2,000) does not correspond to any logical monthly division of the $6,000 annual tax and likely results from an arithmetic error, such as dividing the annual tax by an incorrect number of periods.
Why is this correct?
The seller owned the property for exactly three months — January, February, and March — before closing on April 1, so they are responsible for three months of the annual tax liability. Dividing $6,000 by 12 months yields $500 per month, and multiplying by 3 months equals $1,500, which is the seller's prorated share. Under standard TREC contract language, this amount typically appears as a credit to the buyer on the closing disclosure, since Texas taxes are paid in arrears.
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