The annual real estate tax on a duplex house is $20,913 and the owner sell the house after 9 months of the tax year. How much annual tax will the seller pay? How much tax will the buyer pay?
9/12 = 0.75
0.75 * 20,913 = ?
To determine the annual tax amount paid by the seller, we need to calculate the tax amount for the entire year and then prorate it for 9 months.
Step 1: Calculate the monthly tax amount.
Divide the annual tax by 12 (months): $20,913 ÷ 12 ≈ $1,742.75 (monthly tax)
Step 2: Multiply the monthly tax by 9 (months)
$1,742.75 × 9 = $15,684.75 (tax paid by the seller for 9 months)
Therefore, the seller will pay $15,684.75 in annual taxes.
Now let's calculate the tax amount the buyer will pay.
Step 3: Subtract the tax paid by the seller from the total annual tax.
$20,913 - $15,684.75 = $5,228.25 (tax amount yet to be paid for the remaining 3 months)
Since the buyer is purchasing the property for the remaining 3 months of the tax year, they will be responsible for paying this remaining amount.
Hence, the buyer will pay $5,228.25 in tax for the remaining 3 months of the tax year.