General MotorsGeneral Motors may receive a tax break worth as much as $45.4 billion under the terms of its government-financed restructuring.

The credit is a final benefit from the company's multibillion-dollar government bailout. Under the terms of the bailout, GM will be able to apply a tax credit related to previous losses and business expenses to future earnings.

This is unusual because GM has changed ownership, The Wall Street Journal said. Normally, when a company restructures, the government imposes limits on this form of tax benefit.

The government inserted this clause in the bailout in order to make companies that benefited from the TARP program more attractive to investors. The rationale was that this would be a better deal for taxpayers because it would stop the bailed out companies from going out of business altogether.

"The Internal Revenue Service has decided that the government's involvement with these companies, both its acquisitions plus its disposals of their stock, means they should be exempt" from the rule, Robert Willens, a New York tax consultant, told The Journal.

The $45.4 billion in future tax savings is made up of $18.9 billion in carry-forwards based on past losses and savings related to costs such as pensions and property.

The losses were incurred by "Old GM", the company that remained in bankruptcy. "New GM" emerged from bankruptcy in June.

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I still have trouble understanding how oneof the bettercorporations in the world in the 1950s could sink so far into oblivion . There is a general feeling throughout the US that the company was run into bankrupsy by an incompetent labor union who had no qualms ablout building a product iferior to the germans and the Japanese, no concern ablut he solvency os the company, and no concern whatsoever ablut striking for higher wageswhen the were making more tahn mostsmall concrns. And ManAGEMENT itself had to be worse than incmpetent . if theylost money for the past decade even my father would have cut off my allowance.

November 10 2010 at 10:57 AM Report abuse rate up rate down Reply

gm has shown a profit of 35 billion in the first 2 quarters this year so why would we continue to give them such a huge tax break could it be someone in our government might benefit from it or someone on wall street how about on all these big decisions that news staions print out how our government officials voted this way theyll be held resposible by the people i bet we would start seeing more voting for the people

November 07 2010 at 8:33 AM Report abuse rate up rate down Reply

This is just WRONG

November 04 2010 at 4:19 PM Report abuse +3 rate up rate down Reply
1 reply to marine1942's comment

why everbody that

November 04 2010 at 8:10 PM Report abuse rate up rate down Reply

Government subsidy of GM is OK as long as they bring back Pontiac, Buick- Cadillac and Chevrolet offer boring, female type cars now...............I want a Macho/Male Sports Sedan like the Pontiac Grand Prix, why has GM decided to be "Female" ? Not for me, Thanks !

November 03 2010 at 8:44 AM Report abuse -1 rate up rate down Reply

I wouldn't trust GM and further than I could spit.

November 03 2010 at 8:35 AM Report abuse +3 rate up rate down Reply