The annual real estate tax on a duplex house is $20,985 and the owner sells the house after 7 months of the tax year. How much of the annual tax will the seller pay? How much will the buyer pay?
Seller:
20,985 * (7/12) = ?
The buyer will pay the difference.
so, the sellers price - 20,985 is for the buyer?
Ms. Sue thank you, but what about the buyer?
To determine how much of the annual tax the seller will pay, we need to calculate the portion of the tax that corresponds to the 7 months they owned the house.
We can use a simple proration formula to calculate this:
Seller's Portion = (Annual Tax / 12 months) * Number of Months Seller Owned the House
In this case, the annual tax is $20,985, and the seller owned the house for 7 months.
Seller's Portion = ($20,985 / 12) * 7
= $3,662.50
Therefore, the seller will pay $3,662.50 of the annual tax.
Now, to determine how much the buyer will pay, we calculate the remaining portion of the annual tax.
Buyer's Portion = Annual Tax - Seller's Portion
= $20,985 - $3,662.50
= $17,322.50
Hence, the buyer will pay $17,322.50 of the annual tax.