Real Estate Tax and Credit Formulas

Some of the most important calculations done in Real Estate involve determining taxes and credit. Sometimes these calculations can be confusing, especially when preparing for the Real Estate test. That’s why Union Test Prep has prepared an awesome chart for you with all the essential formulas, you’ll need so that you’re never confused by these calculations again! Use this chart to help you navigate preparation for the real estate test. For additional study materials, including practice tests, study guides, and flashcards, check out Union Test Prep’s FREE Real Estate Test preparation materials.

Also, be sure to look at our formula charts for the Real Estate Areas of:

• Depreciation

• Measurement

• Percentages, Interest, and Mortgages

Tax and Credit Formulas

Formulas	Symbols
\(T=TR \cdot AV\)	T = Tax TR = Tax Rate AV = Assessed Value
\(SA=TR \cdot PS\)	SA = Special Assessments TR = Tax Rate PS = Property Size
\(DST=(\frac{PP}{100})\cdot TR\)	DST = Documentary Stamp Tax PP = Purchase Price TR = Tax Rate
\(DTR=\frac{TPT}{365}\)	DTR = Daily Property Tax Rate TPT = Total Property Tax
\(BCPT=DTYPC \cdot DTR\)	BCPT = Buyer’s Credit for Property Taxes DTYPC = # Days in Tax Year prior to closing DTR = Daily Property Tax Rate
\(DPRR=\frac{TPR}{DM}\)	DPRR = Daily Prepaid Rent Rate TPR = Total Prepaid Rent DM = # Days in Month
\(BCPR=DCEM \cdot DPRR\)	BCPR = Buyer’s Credit for Prepaid Rent DCEM = # Days from closing to End of Month DPRR = Daily Prepaid Rent Rate
\(AMI=CLP \cdot MR\)	AMI = Annual Mortgage Interest CLP = Current Loan Principal MR = Mortgage Rate
\(MMI=\frac{AMI}{12}\)	MMI = Monthly Mortgage Interest AMI=Annual Mortgage Interest
\(DMI=\frac{MMI}{DM}\)	DMI = Daily Mortgage Interest MMI = Monthly Mortgage Interest DM = # Days in Month
\(BC=DBM \cdot DMI\)	BC = Buyer’s Credit DBM = # Days from Beginning of Month DMI = Daily Mortgage Interest