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GM’s Tax Shelter-Another $16 billion not available to other car makers [Has Hillary condemned this?]

Posted on 10/03/2016 6:01:55 AM PDT by SJackson

As everyone else’s taxes rise, one favored outfit may not have to pay federal taxes for years: General Motors. In another sweet deal from its benefactors on Pennsylvania Avenue, the government-owned car company is set to profit from billions of dollars in tax breaks not available to other businesses in the same predicament.

The new GM will be allowed to claim a tax benefit from some $16 billion of net operating losses carried over from the old company, allowing it to avoid paying taxes on future profits, perhaps for years. The issue is a common accounting practice called “tax-loss carry forward,” under which businesses can write off losses against future profits for up to 20 years.

The losses are considered important assets on any company’s balance sheet, but they typically don’t survive bankruptcy. Under a longstanding section of the tax code passed to prevent companies from buying other companies for the purpose of assuming their tax losses, a business that undergoes a change in ownership usually has to forfeit the old company’s net operating losses.

That would normally be the case for GM, except that the government is its new majority shareholder. While transfers of net operating losses during bankruptcy can sometimes be handled through reorganization plans, that was not what the Obama Administration did. When GM filed for bankruptcy, it chose a so-called “363 sale,” which allows the company to take a fast track to the sale without the due process protections usually provided to creditors.

(Excerpt) Read more at ...

TOPICS: News/Current Events; Politics/Elections
KEYWORDS: automotive; generalmotors; gm
Not quite the same as the Trump "scandal" as the loss carryforward isn't usually available in bankruptcy.

Still for credibility Democrats must condemn the GM and Chrysler bankruptcies to have any credibility at all. Solyndra was sold in bankruptcy for no assets other than their loss carryforward in another Obama scam, though Solyndra should be condemned from it's inception

1 posted on 10/03/2016 6:01:55 AM PDT by SJackson
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To: SJackson

There they go again the WSJ has been reading my mind for 2 days. The lack of congruency by the media is frightening. Especially in relation to discussing the tax code, where is a panel of CPA’s on MSLSD or Clinton News Network to explain it in English?

2 posted on 10/03/2016 6:03:58 AM PDT by taildragger (Not my Monkey, not my Circus...)
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To: SJackson

Yes, ever since their taxpayer-funded bail-out, GM has not had to pay the federal taxes that other auto makers have to pay. Then when their quarterly profit reports come out, they brag about how much they have made, when they should thank the stupid taxpayers who don’t have the luxury of not paying their taxes. You’d think the other car companies would point this out in their advertising, but they’re scared of the federal government, as well they should be.

3 posted on 10/03/2016 6:15:51 AM PDT by txrefugee
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To: SJackson
The new GM will be allowed to claim a tax benefit from some $16 billion of net operating losses carried over from the old company,...

seems to me all not done recalls\warranty work from the old company should now be carried over.
4 posted on 10/03/2016 6:31:08 AM PDT by stylin19a
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To: txrefugee

Don’t forget folkes how the bond holders got screwed by Dear Leader in favor of the union thugs. They broke the law and got away with it.

That is a common thread with these enlightened elites.

5 posted on 10/03/2016 6:54:26 AM PDT by phormer phrog phlyer
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To: phormer phrog phlyer

” the bond holders”

First thing I thought of.

Considering the allowance GM got, you’d think they’d be on the hook for paying the bond holders back.

I keep dreamin’.

6 posted on 10/03/2016 7:09:35 AM PDT by fruser1
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To: taildragger

My error on the date, article is from 2010

7 posted on 10/03/2016 8:05:18 AM PDT by SJackson (The Pilgrims—Doing the jobs Native Americans wouldn’t do !)
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