A house sells for $89,500; the buyer pays $50,000 in cash and gives the seller a mortgage for the balance. If the state transfer tax is 1% of the sale price, how much tax is due?

Prepare for the Real Estate Math Exam with our comprehensive study materials. Use interactive quizzes and detailed explanations to master the math skills needed in real estate. Be exam-ready today!

Multiple Choice

A house sells for $89,500; the buyer pays $50,000 in cash and gives the seller a mortgage for the balance. If the state transfer tax is 1% of the sale price, how much tax is due?

Explanation:
Transfer taxes are based on the sale price, not on how the purchase is financed. So multiply the sale price by 1%: 89,500 × 0.01 = 895. The down payment and the mortgage amount don’t change the tax base in this scenario, so the tax due is 895.

Transfer taxes are based on the sale price, not on how the purchase is financed. So multiply the sale price by 1%: 89,500 × 0.01 = 895. The down payment and the mortgage amount don’t change the tax base in this scenario, so the tax due is 895.

More Multiple Choice Questions
Subscribe

Get the latest from Passetra

You can unsubscribe at any time. Read our privacy policy