Real Estate Math
Property taxes of $3,600 are paid for the full year. The property sells with a closing date of April 1 (day 91 of 365). How much does the seller owe the buyer in prorated taxes? (Use 365-day year)
A$2,700✓ Correct
B$900
C$1,800
D$3,600
Explanation
The buyer owns the property for 365 - 91 = 274 days. Buyer's share = ($3,600 ÷ 365) × 274 = $9.863 × 274 = $2,702.40 ≈ $2,700. The seller owes the buyer a credit for the taxes covering the buyer's ownership period.
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