Martina is purchasing a home in Winnipeg.The closing date is October 1.Each year's real property taxes are payable in June for taxes owed to December 31.The amount of the taxes paid by the vendor for the entire year is $2400.In the circumstances of this transaction,which of the following is a valid statement with respect to an adjustment on taxes?

Question

Quizplus · Accepted Answer

Since the closing date is October 1, the purchaser is responsible for paying taxes from that day onwards. Therefore, the vendor is responsible for paying taxes for the period from January 1 to September 30. This means that the purchaser is responsible for paying taxes for the period from October 1 to December 31. The total tax for the year is $2400, and the vendor has already paid for the period from January 1 to September 30, which is 9 months. Therefore, the adjustment will be calculated as follows: 
$2400 / 12 months = $200 per month 
$200 x 3 months = $600 adjustment 
This means that the vendor will receive approximately $600 in adjustment from the purchaser.

Martina Is Purchasing a Home in Winnipeg