Every proration is days × daily amount. The question tells you the year basis and who owns the closing day; you decide which party is debited.
| 365-day year | Count actual calendar days |
|---|---|
| 360-day year | Every month has 30 days |
| Taxes paid in arrears | Debit the seller, credit the buyer |
| Prepaid taxes, rent collected in advance | Credit whoever paid for days they will not own |
Taxes of $4,380 for the year are unpaid. Closing is June 15, a 365-day year, and the seller owns the closing day. January through May is 151 days, plus 15 in June: 166 days. $4,380 ÷ 365 = $12 a day, so the seller owes $1,992. Debit the seller, credit the buyer.
A sale closes on June 15. This year's property taxes of $4,380 will be paid in arrears at the end of the year and are unpaid at closing. Prorate on a 365-day year; the seller owns the day of closing. How is the tax prorated on the closing statement?
A seller paid this year's property taxes of $4,800 in full in January. The sale closes on April 15. Prorate on a 360-day year (30-day months); the seller owns the day of closing. How is the tax prorated on the closing statement?
A rental home sells with the tenant in place. On June 1 the seller collected the month's rent of $1,800. Closing is June 12. Prorate on the actual days in the month (30 days); the seller owns the day of closing. How is the rent prorated?
When the question says so. Exam questions state the basis; a 360-day year gives every month 30 days.
The seller, for the days she owned the property. The buyer is credited because the buyer will pay the whole bill later.
The buyer, for the days after closing that the buyer will own.