Closing statements and prorations for the Florida real estate exam
Last reviewed: November 2026
A real estate closing statement lists every amount each party owes (debits) and receives (credits) at closing. Prorations split ongoing costs and income, like property taxes and rent, between buyer and seller by the number of days each one owns the property.
On the Florida sales associate exam, closing statements and computations are area XIV (6% of the exam, DBPR candidate information booklet). The logic is always the same, so a few rules cover most questions.
Debits and credits: the two rules
- A debit is a charge: money the party pays or gives up.
- A credit is money the party receives or is treated as having already paid.
When an item moves between buyer and seller, it is a debit to one and a credit to the other (a "double entry"). When an item involves only one party and an outside payee (lender, broker, county), it appears only on that party's side.
Common closing statement entries
| Item | Buyer | Seller |
|---|---|---|
| Purchase price | Debit | Credit |
| Earnest money deposit | Credit | — |
| New loan from a lender | Credit | — |
| Seller's existing loan paid off | — | Debit |
| Mortgage assumed by buyer | Credit | Debit |
| Purchase money mortgage (seller financing) | Credit | Debit |
| Unpaid property taxes, seller's share (paid in arrears) | Credit | Debit |
| Rent the seller collected in advance, buyer's share | Credit | Debit |
| Tenant security deposits held by seller | Credit | Debit |
| Expense the seller prepaid, buyer's share (e.g., HOA dues) | Debit | Credit |
| Brokerage commission (when the seller pays it under the listing) | — | Debit |
| Doc stamps on the deed | Debit to the party the contract charges | |
| Doc stamps on the note/mortgage and intangible tax | Debit to the party the contract charges | |
Security deposits move to the buyer because Florida law requires all tenant deposits and advance rents to be transferred to the new owner on a sale (s. 83.49(7), F.S.). Tax rates for the stamp lines are on our Florida documentary stamp tax page.
What are prorations in real estate
Prorating divides an amount by time. Two types come up on the exam:
- Accrued (paid in arrears): the seller used something that hasn't been paid yet, typically property taxes. The seller owes the buyer: seller debit, buyer credit.
- Prepaid (paid in advance): someone paid ahead. If the seller prepaid an expense, the buyer reimburses the seller (buyer debit, seller credit). If the seller collected rent in advance, the seller passes the buyer's share to the buyer (seller debit, buyer credit).
Florida property taxes become due on November 1 of the tax year (s. 197.333, F.S.), so at most closings the year's taxes are still unpaid and are prorated as an accrued item.
How prorations are calculated
- Find the daily (or monthly) amount.
- Count the days owed by the right party. Check who owns the day of closing; the question will say.
- Multiply, then decide debit/credit.
Use the method the question gives: a 365-day year (actual days) or a 360-day "banker's year" with 30-day months.
Property tax proration example
Annual taxes $4,380, unpaid. Closing June 15. The buyer owns the day of closing.
- 365-day year: seller owns Jan 1 – Jun 14 = 165 days. $4,380 ÷ 365 = $12.00 × 165 = $1,980.
- 360-day year: 5 months × 30 + 14 = 164 days. $4,380 ÷ 360 × 164 = $1,995.33.
- Entry: seller debit, buyer credit.
Rent proration example
The seller collected June rent of $2,100 on June 1. Closing June 15, buyer owns the day of closing. Use a 30-day month.
- Buyer's days: June 15–30 = 16 days. $2,100 ÷ 30 = $70 × 16 = $1,120.
- Entry: seller debit, buyer credit.
Prepaid expense example
The seller paid June HOA dues of $310. Same closing date and method.
- $310 ÷ 30 × 16 = $165.33.
- Entry: buyer debit, seller credit (the buyer reimburses the seller).
A simplified closing statement, worked
Price $350,000. Buyer deposited $10,000 and gets a new $280,000 loan. Seller's loan payoff is $190,000; commission is 6%; tax proration is $1,980 (from above). In this example the contract charges deed stamps to the seller and the note stamps and intangible tax to the buyer. Title, recording and lender fees are left out to keep it short.
| Item | Buyer debit | Buyer credit | Seller debit | Seller credit |
|---|---|---|---|---|
| Purchase price | $350,000.00 | $350,000.00 | ||
| Deposit | $10,000.00 | |||
| New loan | $280,000.00 | |||
| Loan payoff | $190,000.00 | |||
| Commission, 6% | $21,000.00 | |||
| Deed stamps, 3,500 × $0.70 | $2,450.00 | |||
| Note/mortgage stamps, 2,800 × $0.35 | $980.00 | |||
| Intangible tax, $280,000 × 0.002 | $560.00 | |||
| Property tax proration | $1,980.00 | $1,980.00 | ||
| Totals | $351,540.00 | $291,980.00 | $215,430.00 | $350,000.00 |
- Cash due from buyer: $351,540 − $291,980 = $59,560
- Cash to seller: $350,000 − $215,430 = $134,570
Exam traps
- The earnest money deposit is a buyer credit only. It never appears on the seller's side.
- The new loan is a buyer credit only. The seller's payoff is a seller debit only.
- For unpaid taxes the seller is debited; for expenses the seller prepaid, the seller is credited; for rent the seller collected in advance, the seller is debited.
- Read who owns the closing day and which year (365 or 360) to use before you count.
Practice closing math
The free Florida practice test includes a tax proration, deed stamps and intangible tax question, each solved step by step. The paid question bank has more closing and proration drills plus full timed exams. For all formulas in one place, see Florida real estate math.
Real Estate Drill is an independent study tool. We are not affiliated with FREC, DBPR or Pearson VUE.