David Saks

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Real Estate Practice : Lesson 3959

  math

A real estate transaction closes on September 12, 2015.


The taxes for 2015 are $8752.40 and they haven't been paid yet.


They have to paid by the purchaser.


When the taxes are prorated for the calendar year, what is the amount that has already been paid, and will this amount be a debit or a credit to the purchaser at the closing table?


Will the purchaser owe any taxes for the calendar year and how much if any ?

 

Take your time. The solution is posted below the wildlife photo.

wildlife

A. $6126.65, which is credit to the buyer because this amount was paid prior to the closing date covering 8 months and twelve days of the tax year prior to the purchaser's closing.

Here's how it works:


8752.4 taxes for the year
divided by
360 days
=
24.312222 a day

8752.4 taxes for the year
divided by
12 months
=
729.366667 a month
times
8 months
=
5834.933336 eight months taxes

12 days
times
24.31 a day
=
291.72 for the twelve days of September
+
5834.93 for the eight months onf the tax calendar year
=
6126.65 total prorated credit to the purchaser.

 

The purchaser will owe $2625.75 and here's why:

8752.4 total calendar year taxes
minus the prorated amount
6126.65
=
2625.75 total annual taxes owed by the purchaser.

 

Wasn't that too easy ?




David Saks



Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • February 23 2015 02:39PM
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