An owner neglected to pay property taxes of $900 for the year 20XX. The owner sold the property and escrow closed December 15, 20XX. Using a 30-day month, what would be the normal proration in escrow?

Question

Quizplus · Accepted Answer

The seller is responsible for the property taxes up to the closing date. Since the escrow closed on December 15, the seller owes taxes for 11.5 months (January 1 to December 15). The proration would be $900 * (11.5/12) = $862.50. Since the seller has not paid any taxes, they are debited $862.50, but the question asks for the normal proration, which is the amount owed for the remaining half-month, $900 * (15/30) = $450. The seller is debited for the taxes they owe, which is $412.50 for the period from January 1 to December 15.

An Owner Neglected to Pay Property Taxes of $900 for the Year