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A seller pays the yearly taxes of $3,600 in advance on July 1. He closes on the sale of the house on November 15. Who owes what to whom?

1 Answer

3 votes

Final answer:

The buyer owes the seller $457.26 for prorated taxes from the date of sale to the end of the year.

Step-by-step explanation:

In this scenario, the seller pays the yearly taxes of $3,600 in advance on July 1. However, the house is sold on November 15. Therefore, the seller has already paid the taxes for the entire year, and the buyer will reimburse the seller for the taxes from November 15 to December 31.

Since there are 46 days remaining in the year after the sale, the buyer will owe the seller 46/365 of the yearly taxes. To calculate the amount owed, we divide $3,600 by 365 and then multiply it by 46. This results in an amount of approximately $457.26 that the buyer owes to the seller.

So, the buyer owes the seller $457.26 for the prorated taxes from the date of sale to the end of the year.

answered
User Thangcao
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