On a Statement of Adjustments, a buyer takes possession of a property on October 1st. The annual municipal taxes for the year are $3,650, paid by the seller for the full year. The statement of adjustments specifies that property taxes are adjusted for the current year. How much will the seller owe the buyer for the municipal taxes?

Question: On a Statement of Adjustments, a buyer takes possession of a property on October 1st. The annual municipal taxes for the year are $3,650, paid by the seller for the full year. The statement of adjustments specifies that property taxes are adjusted for the current year. How much will the seller owe the buyer for the municipal taxes?

Answer options: ✅ $912.50

• $608.33
• $2,737.50
• $600.00

Correct answer: $912.50

Explanation: The seller has paid for the full year ($3,650). The buyer takes possession on October 1st, meaning the buyer is responsible for taxes for October, November, and December (3 months, or 92 days based on actual days). If based on months, seller paid for 12 months, buyer owes 3 months. If based on days, $3,650 / 365 days = $10.00 per day. Buyer owes for 92 days (October 1 to December 31). So, $10.00 * 92 days = $920.00. However, options suggest monthly calculation or rounding. If it is 3 months, then 3/12 of $3,650 = $912.50. This is the amount the seller needs to credit the buyer, as the seller has overpaid for the period the buyer owns the property. This is a common adjustment on the Statement of Adjustments.