Real Estate Math

A North Dakota property has annual taxes of $4,200. Closing occurs on April 1. How much does the seller owe the buyer in prorated taxes (using a 365-day year, taxes not yet paid)?

A$850
B$1,036✓ Correct
C$1,225
D$1,400

Explanation

Seller's share: Jan 1 through March 31 = 90 days. Daily tax rate = $4,200 / 365 = $11.507/day. Seller's proration = 90 × $11.507 = $1,035.62 ≈ $1,050.

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