On the settlement sheet for a closing where prior year taxes were unpaid, how is this typically presented?

In real estate transactions, the settlement sheet, or closing statement, outlines the financial details and the distribution of debits and credits between the buyer and seller. When unpaid prior year taxes are involved, they are typically considered a liability that the seller is responsible for.

When these taxes are unpaid, they are presented as a debit to the seller on the settlement sheet. This reflects the seller's obligation to pay these dues, deducting the amount from their proceeds at closing. Conversely, this amount does not work as a credit to the broker or the buyer but highlights the seller's indebtedness regarding that obligation.

Therefore, the presentation of these taxes as a debit to the seller solidifies their responsibility to settle that debt, ensuring clarity in the financial transactions that take place at closing.