GM Bailout Shields $45 Billion of Profits

[Hannah Bell]

General Motors Co. will avoid paying taxes on as much as $45.4 billion in profits over the next 20 years because of tax benefits the company was allowed to keep when it left bankruptcy in July 2009, The Wall Street Journal reports, citing a regulatory filing. At the standard corporate tax rate of 33%, the benefit could save GM roughly $15 billion in taxes.

The existence of such a tax break was disclosed last summer. But the amount came to light in documents the company filed last Friday in preparation for its initial public offering this month.

GM’s filing says it kept $18.9 billion in tax-loss carryforwards and $26.5 billion related to the cost of pensions, property, warranties and other items. Tax-loss carryforwards allow companies that record big losses to carry forward the loss amount so that it can help offset future profits. Companies usually book carryforwards as an asset.

Typically a company would lose those tax benefits in Chapter 11. But the Journal says an unusual provision of the U.S. government bailout program preserved those benefits for GM and other rescued companies.

http://www.factoryrat.com/factoryrat/modules.php?name=Forums&file=viewtopic&t=13740

[dkf]

1. This makes our investment in GM worth more and will make GM more stable going forward.

[Taitertots]

2. Socialize the loses and privatize the gains n/t

[Egalitariat]

3. Have you been following along? The US Government owns GM. That's who gets the gains***

nm

[Crabby Appleton]

4. The US Government owns 61%, Canadian Government

owns 11.7%, United Auto Workers union retiree health-care trust owns 17.5%, bond holders of the former GM own 9.8%

[Starry Messenger]

5. k&r

[SidDithers]

6. Unrec...nt

Sid

[somone]

7. So... if a Chinese/Indian company buys GM

they get to keep all that, right?

[Greyhound]

8. Back in the black. K&R.

I see the usual bankster sycophants (fawning parasites) are cropping up with their usual argument.