David Saks: April 2008

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

Not For The Squeamish


If a real estate tax is levied for a current calendar year, payable during that year or in the coming year, the period from January 1st to the date of closing, or the day before closing, if you're in a state which excludes the sale date, we're dealing with what is commonly known as the accrued portion.

Just what is the accrued portion and how do we deal with the math?

If the current tax bill "ain't in the mail" the parties at closing have to agree on a fiqure which is estimated based on last years bill. That doesn't relieve you of the obligation to know if there have been any changes in the assessment rate for the current year if you happen to be in a reassessment calendar year, like we have coming up here in good old Memphis in 2009.

Here's a nifty little example, so let's get our pencil sharpened and a clean piece of paper to scribble on, and here we go:

The sale is gonna close on September 17 this year and the current real estate taxes amounting to 1200 bucks have to be prorated. Let's use the 360 day year, or the good old bankers year, for this example. The accrued portion is 8 months and seventeen days. What we have to do first is prorate the real estate tax based on the number of months and the days :

$1200 / 12 months = $100 per month

$100 / 30 days = $3.333 a day.

Now ladies and gentlemen we can multiply these numbers by the accrued period, add the numbers we got from our calculations and come up with the figure we call the prorated real estate tax.

$100 x 8 months = $800

$3.333 x 17 days = $56.661

$800 + $56.661 = $856.661

So you see, the accrued real estate tax for 8 months and 17 days is equal to a grand total of of $856.66 which we have rounded off so the seller won't have to break a dollar bill for one thousandth of a cent.

We call this figure the sellers accrued earned tax and it is a credit to the buyer a debit to the seller when they take it to the closing table.

Wasn't that fun ?

Have you ever had a math nightmare with taxes at closing ?

Thanks for your thoughts.

David Saks

Time&Temp Memphis

Legal Disclaimer
Please be advised that:

 The information and notices contained in this blog are intended to summarize recent developments and news. The posts are presented as general research and information. These posts are not intended, nor should be regarded, as legal advice. Some blog posts concern allegations made in civil lawsuits and in criminal indictments in United States Courts. All persons are presumed innocent until convicted of a crime and proven guilty. Readers who have particular questions or who believe that they need legal counsel should seek the advice of a qualified attorney. It is neither the editor's or author's intention to create a confidential relationship or any broker-client relationship via communication from this site at any time. Please consult with your state real estate board if questions & answers in the education section conflict with the laws of your region or if you need clarification regarding their applicability or how they may govern the services that you provide.

By entering this web site, you understand the following:
When you select a link to an outside Web site, you are subject to the privacy, copyright, security, and information quality policies of that Web site. David Saks:
1.DOES NOT control or guarantee the accuracy, legality, relevance, timeliness, or completeness of information contained on a linked Web site;
2.DOES NOT endorse linked Web sites, the views they express, or the products/services they offer unless linked web sites, the views they express, or the products/services they offer endorse or support David Saks in accordance with the standards of the Tennessee Real Estate Commission and the Federal Government's laws regarding commerce and the application, solicitation and transmission of internet-related concerns, commerce or social networking;
3.CANNOT authorize the use of copyrighted materials contained in linked Web sites;
4.IS NOT responsible for transmissions users receive from linked Web sites;
5. That DavidSaks.Com is biographical & real estate related. Some links within will leave this site.
6. http://activerain.com/profile/davidsaks is internet-compliant & abides by the rules & regulations of the Tennessee Real Estate Commission, Eve Maxwell, Executive Director.
7. Unless indicated otherwise, ActiveRain does offer listings, or IDX and is provided for licensed salespersons, brokers, buyers & sellers of real property as a community & professional service.
8. David Saks is a retired / licensed real estate broker in the State of Tennessee, license #290452, and an independent contractor.
9. Information is believed to be accurate, but not guaranteed, at any realty link or document connected to the World Wide Web & viewable by anyone connected to the internet who has a web browser.
10. Brokers, buyers, sellers, agents & anyone should independently verify any information prior to submitting any offer to purchase goods & services from any link.
11. Please Visit The American Real Estate Alliance or Memphis.8k.Com for additional information regarding property issues for real estate professionals and consumers.


Photos © & Licensed by Nova Development

All Content Protected © 
Before you even think about
committing a real estate crime
click this red button.
Real Estate Crimes

© All Rights Reserved.





"Information generated by the Department of Justice is in the public domain and may be reproduced, published or otherwise used without the Department’s permission. Citation to the Department of Justice as the source of the information is appreciated, as appropriate."

Department of Justice Legal Policies


  Real Estate Crimes


Click "HERE" For Today's Question



TheListen Now!

David Saks Show

Saturday Nite

9pm-12am Central

University of Memphis



America's Hobby

Click Elvis

Mr.Saks' participation in ActiveRain ended April 13, 2015.

His blog archives will remain online.

May God bless you.

Comment balloon 11 commentsDavid Saks • April 06 2008 02:44PM
Not For The Squeamish
If a real estate tax is levied for a current calendar year, payable during that… more
Kick Backs & Referral Fees : Are They Good Are They Bad
Kickbacks and referral fees: Are they good Are they bad What are your experiences with them RESPA, the Real Estate Settlement Procedures Act, prohibits the payment of kickbacks… more
The Uniform Settlement Statement : HUD-1 Serious Question
The Uniform Settlement Statement - HUD-1 Form. What does it mean RESPA, the Real Estate Settlement Procedures Act, requires that a special HUD form be completed. This form… more
The Good Faith Estimate : Any Problems
Another disclosure requirement is: The Good Faith Estimate of Settlement Costs : GFE No later than three business days after receiving a loan application, the lender has to provide the… more
Disclosure Requirements : What Are They
We all know that lenders and settlement agents have disclosure obligations. What are some of them at the time of the loan application and the loan closing. The Special Information… more