Question

On February 1, a seller paid $1,140 in annual property tax for the current calendar year. He sold the house with the closing set for April 1. What will be the seller's credit for the property taxes already paid if the buyer pays for the day of closing?

Answer 1

Answer:

$288

Explanation:

Since the total property taxes for the year are $1,140, to find the property tax per month we have to divide by 12 ⇒ $1,140 / 12 = $95 per month

The seller is responsible for paying the property taxes during 3 months and 1 day, to find out the amount for that 1 day we divide the monthly tax by 30 = $3.17 per day.

the total seller's credit = ($95 x 3) + $3 = $285 + $3 = $288

*The seller's credit includes all the expenses that must be paid by the seller, while the seller's debit includes all the money that he receives.