Question

The taxes on a property were $4,800. The closing took place on June 15th. What is the seller's share of the taxes? Use the 30-day/12 month method to derive your answer and assume the seller owns on the day of closing.

Answer 1

Answer:

$2200

Explanation:

The reason is that the property owned by the seller was 5 and half year starting from first of January to 15th of June. This means that 5.5/12 share of the total property tax relates to the seller and the remainder 6.5 months of total 12 months relates to the buyer of the property.

Hence the property tax for:

Seller = 5.5 / 12 * $4800 = $2200

Buyer = 6.5 / 12 * $4800 = $2600

Ratio method is used above to calculate the relevant shares of each party.