Real Estate Math

A Washington home sells for $650,000. The seller pays Washington's Real Estate Excise Tax (REET) of 1.28% on the first $500,000 and 2.75% on the amount above $500,000. What is the total REET?

A$5,000
B$8,320
C$10,525✓ Correct
D$12,000

Explanation

REET on first $500,000 = $500,000 × 1.28% = $6,400. REET on remaining $150,000 = $150,000 × 2.75% = $4,125. Total REET = $6,400 + $4,125 = $10,525.

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