Question

If a seller prepaid the taxes of $4,400 and the closing is set for May 19, using the 12 month/30 day method what will the buyer owe the seller as prorated taxes?

Answer 1

Answer:

  $2701.11

Step-by-step explanation:

The buyer owes for taxes for the remainder of the year, 11 days in May and 7 more months: 7 11/30 months out of 12.

  (7 11/30)(1/12)(4400) = (221/360)(4400) = 2701 1/9 ≈ 2701.11

The buyer will owe prorated taxes of $2701.11.