Skip to comments.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 elses 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 companys balance sheet, but they typically dont 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 companys 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 wsj.com ...
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
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?
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.
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.
” 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’.
My error on the date, article is from 2010
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