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Lost among the fury about how taxpayers were treated in the Citigroup TARP repayment deal was the fact that Citigroup was given another secret bailout through the forgiveness of a $38 billion tax liability
The law says that in the event of a change in ownership, companies can no longer use loss carryforwards to offset future income. This law is designed to prevent companies from running around gobbling up defunct companies just to get huge tax breaks. The government’s purchase of 34% of Citigroup’s common stock constitutes a change in ownership.
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