Wednesday, October 30, 2013
Wall Street Journal, J.P. Morgan's $5.1 Billion Settlement Is Tax Deductible:
Bank Could Save Nearly $1.5 Billion in Taxes:
J.P. Morgan Chase & Co.'s $5.1 billion settlement with Fannie Mae
and Freddie Mac will be entirely tax deductible for the bank, according
to a person familiar with the situation—effectively lessening the
bank's true payout and shifting part of the settlement's cost to
The ability to deduct the cost of the settlement could
save J.P. Morgan nearly $1.5 billion in taxes, based on the bank's
29.1% effective tax rate for the first half of 2013. It isn't known
whether J.P. Morgan will actually go ahead and take the deduction. ...
Tax experts say it isn't surprising that a big chunk of the settlement
would be deductible. "This is exactly the kind of thing everybody
deducts. That's the way the tax system works," said Robert W. Wood, a tax attorney with Wood LLP in San Francisco.