Bailout Banks Enjoy Tax Breaks As They Repay

[ChromeFoundry]

Source: AP

Companies Can Use Current Net Operating Losses To Offset Future Taxable Income

9:08 pm EST December 16, 2009

WASHINGTON -- Citigroup and other banks starting to repay the billions of dollars they borrowed from the government are getting another boost as they exit the bailout program: Billions more in tax breaks.

Tax law allows money-losing corporations like Citigroup Inc. and General Motors Co. to use current net operating losses to offset future taxable income, reducing their tax bills for up to 20 years after the losses occur.

Under ordinary circumstances, those tax breaks would be severely limited if the companies underwent an ownership change, much like many of them did when the government acquired big blocks of their stock.

Losing the tax breaks would have substantially reduced the value of the companies, even as the government was trying to prop them up with bailout funds.

The Treasury Department didn't want that to happen, so it started issuing tax guidance about a year ago that said the rules didn't apply when the government, through its bailout programs, caused the ownership change.


Read more: http://www.newsnet5.com/money/21983742/detail.html

[OhioChick]

1. Tax breaks yet? For what? n/t

[BunkerHill24]

2. Keeping your money in the Bank?

:shrug:

[ChromeFoundry]

3. Remember this quote?

"My administration is the only thing between you and the pitchforks." - Barack Obama

[OhioChick]

4. I'm remembering a lot of quotes as of late....

:mad:

[AlphaCentauri]

5. wish individuals had the same privileges eom

[PSPS]

6. Actually, they do.

You've always been able to carry losses forward. In this case, it wouldn't make sense for the companies to lose this ability. Otherwise, they'd be paying the tax out of the bailout funds anyway.