It was ON the WEB last night, but NOT in my PAPER today!!!
Oh, you are going to LUUUVVV THIS, America!!!!
"If a company ends up selling their securities at a loss to the government, the amount of the loss may be applied toward a deduction on their corporate taxes -- meaning that in addition to the $700 billion, the U.S. Treasury may also see less money coming back in corporate taxes as a result of its own program....
Under a tax provision called loss carryback, a company can use a loss in one year to offset the taxes owed on the two previous years of profits. So, if a firm lost money this year, it could still take advantage of a deduction -- and maybe even get a refund -- based on their previous profits."
How is that ass feeling these days, 'murkn shit-eaters? Pretty worn out, isn't it?
Well, BUCK UP, young studs, because there is a WHOLE LOT MORE POUNDING COMING!!!
"Banks to see write-offs after asset sales to gov't" by Devlin Barrett, Associated Press | October 3, 2008
WASHINGTON --The biggest tax breaks in the financial industry bailout may be those that aren't even in the bill. Banks and other financial institutions can conceivably write off billions of dollars in losses after they sell bad mortgage assets to the government.
Congress passed a rescue package Friday that allows as much as $700 billion of taxpayer money to be used by the Treasury Department to buy up distressed mortgage-backed securities. Those securities are now dead weight on banks' balance sheets, smothering their ability to lend to each other, businesses and consumers.
If a company ends up selling their securities at a loss to the government, the amount of the loss may be applied toward a deduction on their corporate taxes -- meaning that in addition to the $700 billion, the U.S. Treasury may also see less money coming back in corporate taxes as a result of its own program.
For instance, if a company has what it had valued at $20 billion worth of such securities on its books, and sells them for $10 billion through the government bailout program, it can claim a tax deduction of $10 billion. At the normal corporate tax rate of 35 percent, that could add up in theory to a $3.5 billion savings for the company, and $3.5 billion less in taxes paid to the government.
All that assumes, though, that the companies are making enough money to claim the deduction against other profits. Under a tax provision called loss carryback, a company can use a loss in one year to offset the taxes owed on the two previous years of profits. So, if a firm lost money this year, it could still take advantage of a deduction -- and maybe even get a refund -- based on their previous profits.
"It's going to drain the Treasury, but I don't think it's going to be a giant drain. It will be significant," said Robert Losey, a professor of finance at American University in Washington, D.C. "But those losses would have been taken in the future, most likely, and the secondary effect of this all should help the economy, so you're going to get some more taxes collected."
--more--"You ready to roll some heads, America. America? Ya there?
