Real Estate Math
A Hawaii seller receives an offer of $875,000 which they accept. The sale closes 45 days later. If the seller had taxes prorated at $4,380/year (paid in arrears), how much does the seller owe the buyer for property taxes at closing? (Use 365-day year)
AA. $540✓ Correct
BB. $559.73
CC. $555.00
DD. $472.50
Explanation
Daily tax rate = $4,380 / 365 = $12.00/day. Seller's portion = beginning of year to closing day. If closing is day 45 of the year: Seller owes 45 days × $12.00 = $540. Using 365 days and daily rate $11.99: 45 × $12 = $540 exactly. Answer B ($559.73) would correspond to different assumptions about the number of days owned.
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