City and county taxes listed for the closing costs amount to how much?

City and county taxes listed for the closing costs amount to how much?

• A. $760
• B. $720
• C. $800
• D. $640

Answer: (A)

City and county taxes are prorated at closing, so the amount shown for closing costs represents the seller’s and/or buyer’s share of that year's taxes for the period each party owns the property. To compute it, use the annual city and county tax bill, divide by 365 to get a daily tax amount, then multiply by the number of days from the closing date to the end of the tax year. The result is the prorated tax due at closing and is reflected on the settlement statement as the amount each party owes or is credited, depending on ownership period. In this scenario, that prorated calculation yields $760, which is why the closing costs list that amount for city and county taxes.

City and county taxes are prorated at closing, so the amount shown for closing costs represents the seller’s and/or buyer’s share of that year's taxes for the period each party owns the property. To compute it, use the annual city and county tax bill, divide by 365 to get a daily tax amount, then multiply by the number of days from the closing date to the end of the tax year. The result is the prorated tax due at closing and is reflected on the settlement statement as the amount each party owes or is credited, depending on ownership period. In this scenario, that prorated calculation yields $760, which is why the closing costs list that amount for city and county taxes.