Real Estate Math
A buyer in Alaska closes on June 1. Annual property taxes are $4,380 and were paid by the seller through December 31 of the prior year. Using a 360-day year, how much does the buyer owe the seller at closing for the tax proration?
A$0 — the seller owes the buyer
B$365✓ Correct
C$1,825
D$2,190
Explanation
If the seller prepaid through December 31, the buyer owes the seller for January 1 through May 31 (5 months = 150 days). Daily tax = $4,380 ÷ 360 = $12.
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