Flint is purchasing a home for $115,750 and is financing 85% of it. The documentary stamp tax on the deed in his state is $0.70 per $100 portion thereof. How much will he pay for the documentary stamp tax?
a.$1405.54
b.$1653.57
c.688.71
d.810.25
My answer is d because the stamp on the deed is the selling price, not the mortgage amount.
I agree
To calculate the documentary stamp tax, we need to find the portion of the purchase price that is subject to the tax and then multiply it by the tax rate.
First, let's find the portion of the purchase price that is subject to the tax. Since Flint is financing 85% of the home's price, he is personally responsible for 100% - 85% = 15% of the purchase price.
So, the portion of the purchase price subject to the tax is $115,750 * 0.15 = $17,362.50.
Next, let's calculate the amount of tax by multiplying the portion subject to the tax by the tax rate. The tax rate is $0.70 per $100 portion thereof, so the tax is $17,362.50 * ($0.70 / $100) = $121.5375.
Therefore, Flint will pay $121.5375 for the documentary stamp tax.
The correct answer is not provided among the options given.
To determine the amount Flint will pay for the documentary stamp tax, we need to calculate 0.70% of the portion of the selling price that is taxable. Since Flint is financing 85% of the home, we can determine the portion of the selling price that is taxable by multiplying the selling price by 0.15 (100% - 85%).
Total taxable portion = $115,750 * 0.15
= $17,362.50
Next, we need to calculate the documentary stamp tax by multiplying the taxable portion by the tax rate of $0.70 per $100.
Documentary stamp tax = ($17,362.50 / $100) * $0.70
= $121.13
However, none of the provided answer choices match the calculated amount. Therefore, the correct answer is not listed among the options provided. You may want to review the available options to see if there is a mistake or consult with a financial professional for further clarification.