Goldman Sachs Sees $5 Billion Earnings Hit Ahead of New Tax Law

[Borealis]

[URL="https://www.nytimes.com/2017/12/29/business/goldman-sachs-taxes.html?ribbon-ad-idx=3&rref=business"]source[/URL]

[QUOTE]Goldman Sachs expects to take a $5 billion charge to its fourth-quarter earnings as a result of the tax bill that President Trump signed into law last week, the bank said in a regulatory filing.

It is a one-time blow for Goldman. The benefits of the law’s tax cuts — including a reduction of the corporate income tax to 21 percent from 35 percent — will be much longer lasting.

Two-thirds of the estimated $5 billion charge comes from Goldman preparing to pay taxes on assets it holds overseas.

Another portion stems from the bank revaluing assets on its balance sheet it intended to use as a tax shield under the old, higher rate. Those assets are now worth less because the corporate tax rate is set to decline — the latest illustration of how companies have to reshape their finances to prepare for the new, lower tax rates.

Under the new tax law, companies may no longer be able to entirely avoid taxes on overseas holdings. But the tax they pay on those assets will drop to a rate of 8 to 15.5 percent, from around 35 percent. To avoid paying the higher rate under the old system, banks and other companies simply left their cash abroad.[/QUOTE]

[the rifleman]

Wait I'm dumb and can't read*.

Either way good, fuck em. Although long run it's a drop in the ocean for them.