How is the cost of the intangible tax calculated?

The cost of the intangible tax is calculated based on the new loan amount using a specific rate. In this case, the correct method involves multiplying the new loan amount by a rate of $.002. This rate reflects the calculation used for the intangible tax, which applies to the total amount of the loan secured by a mortgage.

It's important to understand how this figure is derived. The intangible tax is often assessed as a way for states to generate revenue from the transfer of certain types of debt, particularly mortgages. By using the formula that incorporates the multiplication by $.002, it accurately reflects the tax implications calculating the total cost incurred from securing the loan.

The other methodologies do not align with the standard practices for calculating the intangible tax. For instance, dividing the new loan amount by a nominal value or using a different multiplier does not yield the correct taxable amount according to established tax regulations. Therefore, the method involving multiplication by $.002 accurately represents the correct calculation of the intangible tax.