Real Estate Math
A property's annual property taxes are $4,200 and are paid in advance on January 1. The property closes on May 1. How much of the prepaid taxes does the seller receive back as a credit?
A$1,400
B$2,450
C$2,800✓ Correct
D$3,150
Explanation
Taxes paid for full year ($4,200). Seller occupied Jan, Feb, Mar, Apr (4 months). Remaining months May-Dec = 8 months. Buyer's share = (8/12) × $4,200 = $2,800. Seller receives credit of $2,800.
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