Formula card
Daily rate = annual amount / 365 (or 360). Share = daily rate x days. Use a 30-day month for every month under the 360-day (banker’s) method.
Worked example
Annual property tax of $4,380 is paid in arrears. Closing is June 30, 2026 and the seller owns the day of closing.
- 365-day method: Jan 1 to Jun 30 = 181 days. $4,380 / 365 = $12 per day. Seller owes 181 x $12 = $2,172 (credit buyer, debit seller).
- 360-day method: 6 months x 30 = 180 days. $4,380 / 360 = $12.1667 per day. Seller owes $2,190.
Here is the trap
- Arrears vs advance. Taxes paid in arrears are a seller debit/buyer credit; prepaid items flip it.
- Day of closing. Conventions differ by state and contract; the question will tell you, so read it.
- Leap years. February has 29 days in 2028 - a 365-day question may still say 365.
Proration solver
Practice tool for exam-style math. Check your state and contract for local conventions.
Ready for the full bank?
National + your state, a timed simulator in your vendor’s format, and weakness tracking. 30 days $39 or 90 days $69, one-time.