If a real estate sale closed on March 21 and the property had an assessed value of $72,500, what would be the seller's settlement statement entry if the buyer owns the day of closing?

When calculating the seller's settlement statement entry for a real estate transaction where the buyer owns the day of closing, it is necessary to determine how to prorate property taxes for the period leading up to the sale. In this instance, the assessed value of the property is $72,500.

First, you would calculate the annual property tax. The formula for this typically involves knowing the local tax rate, but a common assumption in instructional materials is to utilize a typical rate. However, since the question doesn't provide a specific tax rate, for illustrative purposes, let us assume the annual property tax rate is around 1.1% (which is a rough average for many jurisdictions in Arizona).

Therefore, the annual property tax would be calculated as follows:

Annual tax = Assessed value x Tax rate

Annual tax = $72,500 x 0.011 = $797.50

Next, you'd find the daily tax amount, which would be calculated as follows:

Daily tax amount = Annual tax / 365

Daily tax amount = $797.50 / 365 = approximately $2.18

Since the closing occurs on March 21, you would need to count the number of days left in that tax period up until March 31.