Don't Mess With Taxes

The first-time homebuyer credit has been in the news lately because of a computer glitch that slowed processing of some returns on which the original 2008 version was being paid back.

As we all are painfully aware, this boondoggle tax credit was created to prop up real-estate related campaign contributions the housing industry after it crashed under the weight of ill-advised subprime loans to unqualified buyers mortgage loan greed.

Its first incarnation -- the one that's caused the most recent IRS and taxpayer trouble -- actually was an interest-free $7,500 loan, not a real tax credit.

Subsequent changes to and extensions of the homebuyer tax break turned it into a real credit of $8,000 for first-time or $6,500 for move-up home purchasers. 

In fiscal year 2010, specifically between Sept. 27, 2009, and Oct. 2, 2010, IRS data show that more than 2.1 million returns included a first-time homebuyer credit that the tax agency deemed was legitimate (as opposed the billions paid out early in the credit's history for bogus claims).

So just how much did these millions of first-time homebuyer claims cost the U.S. Treasury that year alone? The amount is this week's By the Numbers figure:

The most first-time homebuyer credit claims in FY2010 were from, no surprise, California. Golden State taxpayers submitted 245,298 federal returns that amounted to homebuyer credit claims of more than $1.8 billion.

My home state of Texas was next, with 186,382 returns from the Lone Star State accounting for more than $1.3 billion in credit claims.

Florida, where the real estate sector has taken a particularly brutal beating, came in third in FY2010's first-time homebuyer claims. Sunshine State taxpayers filed 128,246 returns seeking $911 million worth of the credit payments.

The fewest claims came from Vermont. There were only 3,944 first-time homebuyer tax credit filings from the Green Mountain State, totaling almost $28 million.

Related posts:

• Homebuyer tax credit payback chaos?
• Homebuyer credit extended again; closing deadline now Sept. 30, 2010
• Homebuyer credit semantics
• IRS computer glitches, tax refund delays mar 2011 filing season
• April 5, 2011: target date for delayed homebuyer credit refunds
• $10 billion paid out in home buyer claims, but how many were bogus?
• 'Successful, costly' first-time-plus homebuyer credit ending
• The federal homebuyer credit's 'exit strategy problem'
• By the Numbers, tax stats for 2011

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