Relaxation of Tax Rules for Corporate Mergers
Date:
September 30, 2008
Maximum Amount:
~ $140.00 billion
Amount Spent:
> $25.00 billion
Deficit Impact:
> $25.00 billion Reinterpretation of the law governing the ability of corporations to account for losses of acquired companies for tax purposes-particularly applicable to bank mergers.
Source:
Notes:
Maximum amount represents cost of change estimated by Jones Day if every bank with unrecognized losses had a change of ownership, if under applicable law all of those losses were in fact "net built-in losses," if there were no offsetting "built-in gains," and if the applicable 382 limitation would prevent, not just defer, the deduction of all such losses (http://www.jonesday.com/pubs/pubs_detail.aspx?pubID=S5711). Amount spent and deficit impact indicate estimates of tax losses from major mergers as of 10/30/08, according to Senator Chuck Schumer (http://www.senate.gov/~schumer/SchumerWebsite/pressroom/record.cfm?id=304737).