Citi gets massive tax breaks, $38 billion of tax breaks for exiting TARP
 

http://aaronandmoses.blogspot.com/20...retain-38.html

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Tuesday, December 15, 2009
Uncle Sam allows Citigroup to retain $38 billion of tax breaks for exiting TARP


Once again, this Administration bends the rules to the bankers.

And didn't we hear Obama give lip service to the proletariat on 60 Minutes Sunday, saying that these bankers just didn't get it? And they were fat cats?

And now, he cuts Citigroup a $38 billion deal on taxes!!!!


WaPo:
Federal tax law lets companies reduce taxable income in a good year by the amount of losses in bad years. But the law limits the transfer of those benefits to new ownership as a way of preventing profitable companies from buying losers to avoid taxes. Under the law, the government's sale of its 34 percent stake in Citigroup, combined with the company's recent sales of stock to raise money, qualified as a change in ownership.

The IRS notice issued Friday saves Citigroup from the consequences by stipulating that the government's share sale does not count toward the definition of an ownership change. The company, which pushed for the ruling, did not return calls for comment.

At the end of the third quarter, Citigroup said that the value of its past losses was about $38 billion, allowing it to avoid taxes on its next $38 billion in profits. Under normal IRS rules, a change in control would sharply reduce the amount of profits that Citigroup could shelter from taxes in any given year, making it much more difficult for Citigroup to realize the entire benefit before the tax breaks expired.

...A senior Republican staffer also questioned the government's rationale. "You're manipulating tax rules so that the market value of the stock is higher than it would be under current law," said the aide, speaking on condition of anonymity. "It inflates the returns that they're showing from TARP and that looks good for them."

No wonder Abu Dhabi is suing Citigroup for their soured $7.5 billion investment.

Heads they win, tails you lose when Uncle Sam makes the rules!

Fuck Citibank.....those assholes raised my APR to 29.99 on a card that I have never made a late payment on....and I've had it for 19 years.....