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Taxes are $1,485 for a July 31 closing. Compute the tax proration and show how the proration will appear on the settlement statement. The day of closing belongs to the buyer, and taxes are paid in arrears. Use the 365-day method for prorating.

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Answer:

$858.45

The proration will appear in this format:

Debit seller $858.45, Credit buyer $858.45

Explanation:

$1,485 ÷ 365 = $4.07 per day $4.07 x 211 days (January 1 to July 30) = $858.45.

Debit seller $858.45, Credit buyer $858.45

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