NU Online News Service, March 10, 12:00 p.m. EST
American International Group Inc. (AIG) said it has taken steps to protect about $65 billion in tax assets by adopting a “Tax Asset Protection Plan.”
Tax loss “carryforwards” are used by companies to reduce tax liabilities. AIG said it had a $32.3 billion federal net operating loss carryforward, $27.8 billion in capital loss carryforwards and $4.6 billion in foreign tax carryforwards but the company's ability to use them could be “significantly limited” if one or more shareholders buy 5 percent or more of its shares.
“The plan is designed to protect AIG's valuable tax assets by reducing the likelihood of an unintended 'ownership change' through actions involving AIG's securities,” said Robert S. Miller, chairman. He said the plan is “particularly important as the U.S. Department of the Treasury begins to reduce its position in AIG.”
If too many people become 5 percent shareholders, it could be considered an ownership change under the Internal Revenue Code and affect the use of the carryforwards.
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