The adjustment of taxes, interest, insurance and/or other costs on a pro-rata basis as of the closing of a sale. (See also closing statement.)
The allocation of expenses, such as taxes between buyer and seller at closing based on the number of days the property is owned during the month of closing.
Certain items such as property taxes and homeowners association dues are continuing expenses that must be prorated (distributed) between the buyers and sellers at close of escrow. If the buyers, for example, owe the sellers money for property taxes that the sellers paid in advance, the prorated amount of money due the sellers at close of escrow is shown as a debit (charge) to the buyers and a credit to the sellers.