A house has a market value of $150,000. The assessed value is 50% of true cash value. What are the annual real estate taxes if the tax levy is 51½ mills?

Rationale

The annual real estate taxes are $3,844.

To calculate the annual real estate taxes, first determine the assessed value, which is 50% of the market value of $150,000, resulting in $75,000. The tax levy of 51½ mills means $51.50 per $1,000 of assessed value, resulting in a total tax of $3,844 when applied to the assessed value.

A ($1,538) YOUR ANSWER

This option represents a miscalculation of the taxes based on an incorrect understanding of the mill rate. The figure does not account for the correct assessed value and tax levy, leading to a significantly underestimated amount.

B ($3,844) CORRECT

This is the correct calculation of the annual real estate taxes. With an assessed value of $75,000 and a tax rate of 51½ mills, the calculation is ($75,000 / 1,000) * 51.5 = $3,844, accurately reflecting the tax owed based on the given values.

C ($5,854) YOUR ANSWER

This choice inaccurately reflects the tax calculation, likely stemming from an incorrect application of the mill rate or an inflated assessed value. The calculations do not align with the provided market value and levy, resulting in an overestimate.

D ($7,688) YOUR ANSWER

This option appears to double the correct tax amount, possibly misunderstanding the mill rate's application. The calculation fails to recognize the assessed value as 50% of the market value, leading to an incorrect conclusion about the real estate taxes owed.

Conclusion

The annual real estate taxes are calculated based on assessed value and the mill rate. In this case, the assessed value of $75,000 multiplied by the tax rate of 51½ mills yields $3,844. Other options reflect various miscalculations or misunderstandings of the assessment process, highlighting the importance of accurately applying the mill rate to the correct assessed value.

A house has a market value of $150,000. The assessed value is 50% of true cash value. What are the annual real estate taxes if the tax levy is 51½ mills?

The annual real estate taxes are $3,844.

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