Thursday, October 30, 2008
Wall Street Journal: PNC Stands to Gain From Tax Ruling; Acquisition of National City Will Bring Billions in Deductions, Experts Say, by Jesse Drucker:
PNC Financial Services Group Inc. will receive several billion dollars in federal tax savings stemming from its purchase of National City Corp., tax experts said, significantly increasing the price tag of the federal assistance that helped spark the deal.
The tax benefit for PNC is the latest outgrowth of a ruling by the Internal Revenue Service and the Treasury Department in late September intended to give a boost to the struggling banking sector. The ruling, which gives banks the ability to quickly use up the "tax losses" of banks they acquire, is adding significantly to the overall cost of the $700 billion bailout package passed by Congress.
Robert Willens, an independent corporate tax analyst based in New York, estimated the tax savings to PNC could total as much as $5.1 billion.