Real estate tax is 20,925 the owner sells after 7 months how much is the sellers tax and how much is the buyers tax

Answer 1

I assume the question is to calculate the real estate property tax. There is also transfer tax.

When calculating property tax, there are 2 methods to use. The first method is the "calendar" year. This method uses the actual number of days in each month. For example, January would be calculated with 31 days.

The second method is the "bankers" year. This method uses 30 days for each month. For example, January would be calculated as having 30 days, not 31.

The question will usually tell you which method to use. This question does not. This question does not give you a specific day of the month for the sale; it stated 7 months. Therefore, each month would be calculated using 30 days. The owner/seller had the property for 7 months, and will owe property tax for those 7 months. The total property tax of $20,925 ÷ 12 months (full year) equals $1743.75 for each month. The owner/seller had the property for 7 months, so 7 months x $1743.75 equals $12,206.75 owed by the owner/seller. The buyer will own the property for 5 months, and will owe property tax for that 5 months.

This would be calculated 5 months x $1743.75 per month equals $8718.75 property tax owed by the buyer.

When you add $12,206.75 plus $8718.75, this equals $20,925 which is the total property tax.