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. You’ll find free materials here:

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

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