Taxes on the property Buyer Alan is purchasing are $3,200 due on December 31. How much of the taxes will be credited to the buyer if closing is on October 15?

To determine how much of the property taxes will be credited to the buyer at closing on October 15, it's essential to calculate the portion of the taxes that applies to the buyer's time of ownership prior to the tax due date on December 31.

The total annual property tax is $3,200, which needs to be divided appropriately based on the number of days in the year. In this case, you first calculate the daily tax rate by dividing the total tax amount by the number of days in the year:

• Daily tax rate = $3,200 / 365 ≈ $8.76 per day.

Next, calculate the number of days from the closing date (October 15) until the tax due date (December 31):

• From October 15 to December 31, there are 77 days (16 days in October, 30 days in November, and 31 days in December).

Now, you can calculate the total tax amount that applies to the buyer after the closing. The buyer is responsible for the property taxes only for the duration of their ownership within that period:

• Buyer’s share of the taxes = Daily tax rate × Number of days = $8.76 × 77 ≈ $676.72