How is the documentary stamp on a deed calculated for a property valued at $550,000?

To calculate the documentary stamp tax on a deed, the rate is typically set per $1,000 of the property's consideration (in this case, its value). In many jurisdictions, this rate can vary, but let’s assume a common rate of $1.10 per $1,000 for illustrative purposes.

To determine the total documentary stamp tax for a property valued at $550,000, follow these steps:

1. First, divide the property's value by $1,000:

$550,000 ÷ $1,000 = 550.

2. Then, multiply the result by the documentary stamp tax rate. If the rate is $1.10:

550 × $1.10 = $605.

If we look at the provided answers, $3,850 might represent a different calculation approach or a simple misunderstanding of the correct rate being used in the area.

Using the proper rate for calculations and understanding the bases of those calculations can help accurately solve similar questions in the future. Hence, while $3,850 was selected, a focused review of the state’s specific tax rates for documentary stamps is essential to arrive at the correct figure efficiently.