math
proration calculation
A proration calculation divides ongoing expenses or income, such as property taxes, rent, HOA dues, or interest, between buyer and seller based on the number of days each owns the property during the period. Find the daily amount, using a 360-day or 365-day year as required, then multiply by the days owed. The closing day is usually assigned by local custom or contract.
- Exam tip
- Ask who has paid and who has used. Taxes paid in arrears are a credit to the buyer and a debit to the seller; prepaid rent collected by the seller is a credit to the buyer.
- Example
- Annual taxes of $7,300 paid in arrears equal $20 per day on a 365-day year; with 100 seller days, the seller is debited $2,000.
Related terms & state variants
Sources
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Last verified: 2026-10-23