Escrow & Title
Proration at closing is used to:
ACalculate the agent's commission on a prorated basis
BFairly divide recurring costs such as property taxes and HOA dues between buyer and seller✓ Correct
CDetermine the seller's capital gains tax liability
DSplit the earnest money between buyer and seller
Explanation
Proration divides recurring expenses like property taxes, HOA dues, and rent between buyer and seller based on their respective periods of ownership during the year. The party who owns the property on a given day typically bears that day's expense.
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