If a property transaction is scheduled to close on May 14ᵗʰ, calculate the individual tax responsibility for the buyer if the total tax owed at the end of the year is $5,000. For this problem, assume that we are dealing with a 365 day calendar year.
A) $0.00
B) $1,821.92
C) $3,178.08
D) $5,000.00

Question

Quizplus · Accepted Answer

The buyer is responsible for the taxes from the day after closing (May 15) to the end of the year. There are 231 days from May 15 to December 31. The daily tax rate is $5,000 / 365 = $13.6986. Therefore, the buyer's responsibility is 231 days * $13.6986 = $3,178.08.

If a Property Transaction Is Scheduled to Close on May