Proration math that shows who is debited, who is credited, and why.
Choose the timing rule, 360 or 365 day method, closing date, and owner of closing day. You will see the full calculation and both closing-statement entries.
Period amount / period days x ownership days. First decide whose days matter. Then use the day method and closing-day owner stated in the question. Keep the daily rate unrounded until the final answer.
Timing tells you whose share to calculate and which party receives the credit.
Use the method named in the question. A banker's year uses 30-day months.
Include closing day with the seller or buyer exactly as the question directs.
The buyer and seller entries are equal. Only their debit and credit labels differ.
Choose the timing rule before you calculate.
The timing decides who receives the credit. This is where most wrong answers start.
The buyer will pay a bill that covers time the seller owned the property. Charge the seller and credit the buyer for the seller's days.
This mode uses actual calendar days and a 365-day year. If the question says 360-day year or banker's year, switch methods.
The seller owns the day of closing in this setup. That adds one day to the seller's count.
You are dividing the annual amount by the annual day count. Switch to monthly only when the stem gives a monthly amount.
Full precision is used in the multiplication. Only the final proration amount is rounded to the nearest cent.
Email the cheat sheet and this calculation.
Get the formula, trap reminders, and your current breakdown in one printable study note.
Try five proration traps without the calculator.
Annual property taxes are $4,380. Closing is July 15. The seller owns the day of closing. Taxes are unpaid. What is the seller credit to the buyer?
Who is debited and who is credited?
A debit is a charge. A credit is a benefit. Every proration posts an equal amount to both sides of the closing statement.
Unpaid tax or expense
Calculate the seller's share. The seller is debited and the buyer is credited because the buyer will pay a bill covering the seller's ownership time.
Expense prepaid by the seller
Calculate the buyer's share. The buyer is debited and the seller is credited because the seller already paid for time the buyer will own.
Rent collected in advance
Calculate the buyer's share. The seller is debited and the buyer is credited because the seller collected rent for time the buyer will own.
Three setups worth practicing.
Notice that the number and the closing-statement labels are two separate parts of every answer.
$4,380 annual taxes, July 15 closing, seller owns closing day
Seller debit $2,352.00. Buyer credit $2,352.00.
$1,200 prepaid dues, April 30 closing, seller owns closing day
Buyer debit $805.48. Seller credit $805.48. Round only at the end.
$2,400 June rent, June 10 closing, seller owns closing day
Seller debit $1,600.00. Buyer credit $1,600.00.
Check these four details before choosing an answer.
Decide who benefited before doing the math
Ask who used the property before closing, who paid or collected the money, and whose ownership days the amount should cover.
Do not mix actual days with a banker's year
A 365-day setup uses actual calendar counting. A 360-day setup treats every month as 30 days.
Assign the closing date to one party
If the seller owns closing day, include it in seller days. If the buyer owns it, stop seller days one day earlier.
Round the final amount, not the daily rate
Keep the unrounded daily rate in your calculator. Rounding it first can change the final answer by several cents.
Build the rest of your closing-math skill.
What is the real estate proration formula?+
Divide the period amount by the days in that period, then multiply the unrounded daily rate by the days assigned to the correct party. Round the final dollar amount to cents.
Does the Texas real estate exam use 360 or 365 days?+
It can use either. The Pearson VUE Texas content outline says proration questions will specify a 360-day year or a 365-day year. Use the method in the question.
Who owns the day of closing on an exam question?+
The question tells you. Assign closing day to the seller if the seller owns it. If the buyer owns it, the seller's count ends the day before closing.
Who gets the credit for unpaid property taxes?+
In the usual exam setup, the seller is debited and the buyer is credited for the seller's share because the buyer will later pay the tax bill.
Can I use this calculator for a live Texas closing?+
Use it to study and to check arithmetic, not to replace a closing statement. A live transaction is controlled by the signed contract and the closing agent's calculations. The current TREC resale contract prorates listed items through the Closing Date.