JPMorgan Chase is reportedly close to receiving $1.4 billion in tax refunds from its acquisition of Washington Mutual.

The tax refund stems from legislation passed last November allowing companies to apply net operating losses from 2008 and 2009 to taxes paid in the prior five years and not just the previous two years (see More Businesses Can Use 5-Year NOL Carryback).

JPMorgan Chase acquired the failing bank Washington Mutual in September 2008 with the encouragement of federal regulators trying to fend off the financial crisis. JPMorgan, as a recipient of $25 billion in funds from the Troubled Asset Relief Program, was originally excluded from claiming the tax refunds, but has since repaid those funds and applied for the tax break.

Washington Mutual is eligible for $2.6 billion in tax refunds, according to The Wall Street Journal, and JPMorgan has been in talks with the Federal Deposit Insurance Corp. and bondholders about claiming the refund. The Journal reported that JPMorgan may be able to receive $1.4 billion of that amount, but it will be held in receivership as part of a settlement with bondholders of loss-making Washington Mutual.

Over 250 companies expect to receive approximately $12 billion in federal tax refunds from the NOL carryback provision, according to the Journal, including Alaska Air, Apache, Borders, Circuit City, HSBC, KB Home, Legg Mason, Lennar, Liz Claiborne, Hovnanian, US Airways and Zale.

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