Sign in to follow this  
Followers 0
NewsFeeder

AutoBlog: REPORT: New GM entitled to $16 billion in federal tax breaks courtesy of Old GM

2 posts in this topic

Filed under: Government/Legal, GM, Earnings/Financials

fritz-henderson-halo-getty-630.jpg

Due to what appears to be a slight (additional) bending of the rules, the "new," post-bankruptcy General Motors has been allowed to carry the $16 billion net operating loss that was created by the "old" GM. That means that New GM will not have to pay taxes on its profits for a while, because the profits can be written off by the losses.

The issue is that the move, called a "tax-loss carry forward," isn't supposed to be available to the automaker. The tax code contains provisions that prohibit a profitable company from buying an unprofitable company for the sole purpose of claiming the unprofitable company's tax losses - and the type of bankruptcy GM went through should have precluded The General's ability to use the tax loss practice.

Except for the fact that GM was bought by the government, and since the government writes the tax code and collects said taxes, it can decide how it wants to handle the companies it owns. General Motors says the move will bolster its "cash position to the benefit of all parties." Critics, on the other hand, say that GM got a $16 billion unfair head start on Ford. Hat tip to Adrian.

[source: The Wall Street Journal | Image: Jim Watson/AFP/Getty]

REPORT: New GM entitled to $16 billion in federal tax breaks courtesy of Old GM originally appeared on Autoblog on Tue, 04 Aug 2009 08:27:00 EST. Please see our terms for use of feeds.

Read | Permalink | Email this | Comments

di
di

autoblog?i=QRxv37uRzac:Pfk9CjM--Mc:wF9xT autoblog?i=QRxv37uRzac:Pfk9CjM--Mc:V_sGL
QRxv37uRzac

View the full article
0

Share this post


Link to post
Share on other sites

Heck, it's my company, my money. Any advantage they can get, I want, atleast until i get my money back.

0

Share this post


Link to post
Share on other sites

Your content will need to be approved by a moderator

Guest
You are commenting as a guest. If you have an account, please sign in.
Reply to this topic...

×   You have pasted content with formatting.   Remove formatting

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

Sign in to follow this  
Followers 0



  • Who's Online (See full list)

    There are no registered users currently online

  • Who's Chatting

    There are no users currently in the chat room