According to documents filed earlier this year with federal regulators, GM can get a tax break of up to $45 billion as part of its government-financed restructuring. The Wall Street Journal had initially reported that GM would not have to pay taxes on up to $50 billion in profits, but later revised the figure to $45 billion, which also includes $18.88 billion of carry-forwards, according to a filing from April.
Under TARP regulations, losses incurred by GM prior to its bankruptcy can be used to offset future tax liability.
Earlier this morning GM announced that it has started the process of a public offering and hopes to launch a $13 billion offering of common stock and mandatory convertible preferred stock.
– By: Stephen Calogera
Source: Automotive News (Subscription Required)