Assuming annual real estate taxes amount to $1,800 and have been paid in advance by the seller, which of the following is correct for a closing set for September 15?

In this scenario, the real estate taxes are $1,800 annually, which means that the seller has already paid this amount in advance for the entire year. Since the closing is set for September 15, we need to determine how much of the real estate taxes cover the period up to the closing date and how much has been pre-paid for the remaining portion of the year.

To break it down, from January 1 to September 15 is approximately 8.5 months of the year. We can calculate the monthly tax amount as follows:

• Monthly tax = Annual tax / 12 months = $1,800 / 12 = $150 per month.

Next, we calculate how much the seller has covered from January to September 15:

• Total tax for 8.5 months = $150 * 8.5 = $1,275.

This $1,275 represents the portion of the annual taxes that covers the time period until the closing date. Since the seller has already paid $1,800 for the year, the amount that has not been used is:

• Remaining taxes = Total taxes paid - Taxes for 8.5 months = $1,800 - $1,275 = $525.

At closing