How would prorated taxes be represented on a settlement statement for a home closing on March 11th?

Prorated taxes on a settlement statement reflect the division of tax responsibilities between the seller and the buyer based on the number of days each party owns the property within the tax year.

In the scenario where a home closes on March 11th, the seller is responsible for property taxes incurred up to the day of closing, which includes all the days prior to March 11th. Consequently, the seller would receive a credit for those days as they have incurred the tax expense but are selling the property to the buyer on that date. The buyer, on the other hand, begins their ownership from March 11th onward, so they will be responsible for taxes for the remaining days in the tax period.

To determine the total number of days for the current year, assuming a standard year of 365 days, the seller would have owned the property from the start of the year until the closing on March 11th, which accounts for 70 days (January 1 - March 11). The buyer will be credited for the portion of taxes from March 12th until the end of the year, which is 295 days.

Thus, on the settlement statement, it is appropriate to debit the buyer for the 69 days of taxes that