GM Bailout Shields $45 Billion of Profits

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

nm

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

Sid

they get to keep all that, right?

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