A seller sold her home and the closing will be November 10. Her taxes are $3,250, in arrears, and the closer will use the 365-day method of calculating the figure and will figure until midnight the day before closing. How will the tax proration appear on the closing statement?

Question

Dakota

Business

1 May, 00:59

A seller sold her home and the closing will be November 10. Her taxes are $3,250, in arrears, and the closer will use the 365-day method of calculating the figure and will figure until midnight the day before closing. How will the tax proration appear on the closing statement?

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Answers (1)

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Lizeth Curtis · Answer 1

The seller is responsible for paying $2,698 in property taxes while the buyer should pay $552.

Explanation:

When you pay taxes in arrears, it means that you are going to pay your property taxes during the final month of the year.

If the taxes are $3,250, we must divide it by 365 days = $8.9041 per day

The seller is responsible for paying all the taxes prior to November 10 and the buyer should pay for the taxes from November 10 to December 31.

The buyer must pay taxes for 62 days (21 days in November + 31 days in December) = $8.9041 x 62 = $552.05 ≈ $552

The seller must pay taxes for 303 days = $8.9041 x 303 = $2,697.95 ≈ $2,698