← Back to exam mathFlorida Tax Proration: 365-Day vs. 360-Day
Proration questions are the most reliably missed math on the Florida sales associate exam — not because the arithmetic is hard, but because three separate decisions have to go right before you ever divide anything: which day count to use, how many days each party owns, and which direction the money moves. Get all three and the math is one line. Miss any one and the wrong answer is sitting right there in the options, because that is exactly how the distractors are built.
Start here: Florida taxes are paid in arrears
This single fact drives the direction of almost every Florida tax proration. Florida property tax bills are issued on November 1 for the calendar year that has already passed, and they stay payable (with early-payment discounts) until they become delinquent on April 1 of the following year. That means when a property changes hands mid-year, the tax bill has not been paid yet — and the person who will eventually pay it in full is the buyer.
So the seller owes the buyer for the months the seller lived there. On the closing statement that shows up as a debit to the seller and a credit to the buyer. If you can recite that sentence under pressure, you have already earned most of the points on this topic.
The exception worth knowing: if the seller prepaid something — HOA dues paid January 1 for the whole year, an annual insurance premium, or occasionally taxes paid early for the discount — the direction flips. The buyer reimburses the seller for the unused portion: credit to the seller, debit to the buyer. Read the question for the word “prepaid.”
365-day year or 360-day year?
The exam uses both, and it tells you which one to use. The reason two conventions exist is that they come from two different industries:
- 365-day (calendar) year — property taxes, HOA dues, and other items tied to the actual calendar. This is the default for anything county-assessed.
- 360-day (banker's) year — per diem mortgage interest, and sometimes insurance. Lenders use twelve 30-day months, which is why Regulation Z per-diem problems divide by 360.
When a question gives you a per-diem interest calculation, the 365-day result is nearly always offered as a wrong answer, and vice versa. Circle the day count in the question stem before you touch the numbers.
The four-step method
- Find the daily rate. Annual amount ÷ 365 (or ÷ 360).
- Count the days belonging to the party the question asks about.
- Multiply. Daily rate × days = that party's share.
- Assign the direction. Unpaid item → seller credits buyer. Prepaid item → buyer reimburses seller.
Counting days without losing time
Memorize the cumulative day count through the end of each month and you skip the addition entirely. The standard exam convention is that the seller is responsible through and including the day of closing — so for a June 15 closing, the seller owns 151 (through May 31) + 15 = 166 days.
| Through end of | Cumulative days |
|---|
| January 31 | 31 |
| February 28 | 59 |
| March 31 | 90 |
| April 30 | 120 |
| May 31 | 151 |
| June 30 | 181 |
| July 31 | 212 |
| August 31 | 243 |
| September 30 | 273 |
| October 31 | 304 |
| November 30 | 334 |
| December 31 | 365 |
Non-leap year assumed, which is what the exam uses unless it says otherwise.
Worked example 1 — unpaid taxes, 365-day year
Closing is April 30. Annual Florida property taxes are $3,650, unpaid. Seller is responsible through the day of closing.
Days: January 1 through April 30 = 120.
Daily rate: $3,650 ÷ 365 = $10.00/day.
Seller's share: 120 × $10 = $1,200.
Because the taxes are unpaid and the buyer will get the November bill, this $1,200 is a debit to the seller, credit to the buyer.
Worked example 2 — a longer day count
Closing is September 15. Annual taxes are $4,380, unpaid.
Days: 243 (through August 31) + 15 = 258.
Daily rate: $4,380 ÷ 365 = $12.00/day.
Seller's share: 258 × $12 = $3,096.
Sanity check: September 15 is a little past the three-quarter mark of the year, and $3,096 is about 71% of $4,380. That fits.
Worked example 3 — prepaid, so the direction flips
A seller prepaid annual property taxes of $5,475. Closing is May 15, 365-day year.
Seller-owned days: 120 (through April 30) + 15 = 135.
Buyer-owned days: 365 − 135 = 230.
Daily rate: $5,475 ÷ 365 = $15.00/day.
Buyer reimburses seller: 230 × $15 = $3,450.
Note what changed: because the item was prepaid, you calculate the buyer's days, not the seller's, and the credit runs to the seller. Calculating the seller's 135 days here gives $2,025 — which will be one of your four options.
Worked example 4 — per diem interest, 360-day year
A buyer closes March 15 on a $300,000 loan at 6%. Prepaid interest runs from closing to April 1 — 16 days, 360-day banker's year.
Daily interest: $300,000 × 0.06 ÷ 360 = $50.00/day.
Prepaid interest: 16 × $50 = $800.00.
If you had divided by 365 you would get $789.04 — which is offered as an answer choice precisely to catch that. Prepaid interest at closing covers the stub period from the closing date to the end of that calendar month; the first full monthly payment then covers the following month.
Worked example 5 — two prorations in one question
Annual property taxes are $6,000 (unpaid). Annual HOA dues are $2,400, prepaid by the seller for the full year. Closing is July 1, 360-day year.
Taxes (unpaid): seller's half-year share = 180/360 × $6,000 = $3,000, credited from seller to buyer.
HOA (prepaid): buyer reimburses the seller for the remaining half = 180/360 × $2,400 = $1,200, credited to the seller.
The trap here is reimbursing a full year of HOA dues ($2,400) instead of only the six months after closing. Each item gets prorated on its own — do not net them in your head before you finish.
The four traps, in the order they catch people
- Wrong day count. Using 365 on a per-diem interest problem, or 360 on a property tax problem. Always find the instruction in the stem.
- Wrong party's days. Prepaid items ask for the buyer's remaining days; unpaid items ask for the seller's elapsed days. Both numbers are always available as answer choices.
- Off-by-one on the closing date. “Through the day of closing” includes that day. “Through the day before closing” does not.
- Wrong direction. Even with the right dollar amount, a question asking whether it is a debit or credit — and to which party — is a separate point you can still drop.
Practice proration under time pressure
Understanding the method and executing it in 90 seconds are different skills. PassFlorida's free practice test mixes proration in with everything else, the way the real exam does — no sign-up needed.
Start the free test →Related
Statutory references: F.S. 197.162 and F.S. 197.333 (Florida property tax proration and payment in arrears); Regulation Z, 12 CFR 1026 (per diem interest). This page is exam-preparation material, not legal or tax advice.