Escrow & Title
A Kentucky settlement statement shows the seller has property taxes that are prepaid through the end of the year. At closing on July 1, the seller should receive a:
ADebit for 6 months of taxes
BCredit for 6 months of prepaid taxes✓ Correct
CNo adjustment since taxes are the buyer's responsibility
DDebit equal to the annual tax amount
Explanation
If the seller has prepaid taxes through year-end and closes on July 1, the seller has paid taxes for the second half of the year that the buyer will benefit from. The seller receives a credit at closing for the 6 months of prepaid taxes (July through December).
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