Question

the buyer and seller are prorating property taxes. step one is to calculate the daily rate next the number of ____ is multiplied by the daily rate to get the prorated amount

Answer 1

Prorating property taxes involves calculating a daily rate based on the annual tax and multiplying that rate by the number of days of ownership to determine each party's share of the tax.

Step-by-step explanation:

The process of prorating property taxes involves calculating the daily rate of tax based on the annual property tax amount and then multiplying this rate by the number of days the buyer or seller is responsible for the property taxes during the year of the transaction.

To prorate property taxes:

1. Determine the annual property tax owed.
2. Calculate the daily property tax rate by dividing the annual tax by the number of days in a year (usually 365).
3. Multiply the daily rate by the number of days of property ownership to ascertain each party's proportional share of the tax.

For instance, if the annual property tax is $3,650, the daily property tax rate would be $10 per day ($3,650 / 365 days). If the buyer took ownership of the property for 90 days that year, the prorated amount owed by the buyer would be $900 ($10 x 90 days).