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What is the first step in calculating the accrued property taxes owed by the seller at closing?

  1. Divide annual taxes by 365

  2. Divide annual taxes by 12

  3. Multiply annual taxes by the number of months occupied

  4. Subtract annual taxes from the sale price

The correct answer is: Divide annual taxes by 12

To calculate the accrued property taxes owed by the seller at closing, the first step is to divide the annual taxes by 12. This is because property taxes are usually paid on a monthly basis, so by dividing the annual amount by 12 months, you can get the amount owed for each month. The other options are incorrect because dividing by 365 would give a daily amount, which is not used for property taxes. Multiplying by the number of months occupied assumes that the seller has already paid the full annual amount, which may not be the case. Subtracting the annual taxes from the sale price is also incorrect as it does not take into account any partial payments made throughout the year. Therefore, the correct first step is to divide the annual taxes by 12.