Real Estate Math
Annual property taxes on an Iowa home are $3,600. At closing on July 1, which party owes the other a proration, and how much?
ABuyer owes seller $1,800
BSeller owes buyer $1,800✓ Correct
CNo proration is needed
DSeller owes buyer $3,600
Explanation
Iowa property taxes are paid in arrears. If taxes are $3,600/year ($300/month) and closing is July 1, the seller has occupied the property for 6 months (Jan-Jun) and owes taxes for that period: 6 x $300 = $1,800 credit to buyer at closing.
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