It Ain't Just Homebuilders Cashing in on the 5 Year Loss Carryback.

I did a recent post HERE about large national home builders claiming 5 year loss carry backs as part of recent legislation.

Money Morning has story HERE, based on WSJ reporting, saying that:

1. Total revenue losses for the federal government for these tax breaks totals $33 BILLION;
2. Claims are coming from a variety of companies, including a possible $1.4 billion to JP Morgan Chase for their takeover of Washington Mutual. (This is occurring despite legislative intent to avoid use of the carry back provisions for companies receiving TARP funding).
   
3. A CBO analysis HERE, done prior to the passage of the legislation, indicated that this form of tax relief would have limited impact. As summarized in the Money Morning report:

The provision for greater tax-loss carry backs would result in a large up-front cost to the government, but the effect of that provision on business spending would probably be small because it primarily would affect firms’ after-tax income rather than their marginal incentives for new investment. Therefore, the effect of the provision on revenues would be significantly greater than its effect on the economy.

Originally created and posted on the Oregon Housing Blog.