Goldman Sachs Group said the U.S. tax reform will cut profit this year by about $5 billion, mainly because of a tax targeting earnings held abroad.
About two-thirds of the hit comes from the repatriation tax, while writing down U.S. deferred tax assets also contributed, the company said in a filing on Friday. The bank also accelerated the delivery of previously granted stock awards to many of its top executives to lower its taxable profit subject to this year’s higher rates.
While bank stocks have rallied on the tax bill’s lower corporate rates, the new law requires charges in the near-term as foreign earnings face taxation and the value of deferred tax assets declines. Citigroup (c, -0.85%) said it expects a hit of as much as $20 billion, while Bank of America (bac, -0.97%) will take a $3 billion charge and Credit Suisse Group (csgkf, +0.06%) is at risk of posting a third consecutive annual loss. (continued here)
You can bet these guys did not want to take losses of this sort. They will make it up, but they still don’t like it.
- Apple’s repatriation tax set at 15.5% in final GOP bill (ped30.com/)
- GOLDMAN SACHS: Trump’s tax overhaul will wipe out $5 billion of profits in the 4th quarter (businessinsider.com)
- U.S. Tax Repatriation Plan May Not Cure Long-Term Dollar Weakness (money.usnews.com)
- US: Tax cut to have an impact on corporate earnings and on repatriation of profits (fxnewslive.com)