Re: Becoming our mother?

From: Antoun Nabhan (
Date: Mon Mar 19 2001 - 14:34:46 PST

Whups, I spoke too soon by including "same taxable year." There's always
those loss carry-forwards - meaning you lost so damn much in one year that
you get to count it against what you make in a later year - which explains
a lot of what's mentioned in that article:

>The study of 250 large publicly traded companies showed that 24 owed no
>tax or received credits against past or future tax obligations in 1998, up
>from 13 in 1997 and 16 in 1996. The study also found that 71 of the 250
>companies paid taxes at less than half the official 35 percent corporate
>rate during the three-year period.

Also, the source of this eyebrow-raiser:
>Recent annual reports filed by Microsoft and Cisco Systems indicate that
>they paid no federal income taxes in 1999 because stock options exercised
>by employees wiped out profits for tax purposes.
>The study found that General Electric, I.B.M., Pfizer, Intel and
>Bristol-Myers Squibb also sharply reduced their tax rates because of stock
>options without having to show reduced earnings to shareholders.

is a rule that is no longer available to the companies; you now have to
reduce your reported earnings as well. It may be all funny-money with
respect to the delta between the value of employee options and the strike
price, but then again it does affect the capitalization of the company and
its ability to raise money & spend money, so maybe it's not entirely a
fictitious expense.

Still seems to me that you have to lose money to get zero taxes, which
means its a strategy only available on a limited basis to "the rich."
Corporate stuff may be different.

At 04:27 PM 3/19/01 -0500, Matt Jensen wrote:
>On Mon, 19 Mar 2001, Antoun Nabhan wrote:
> > If there's anyone out there making corporate profit or personal income and
> > paying zero tax, all in the same taxable year, I'm very curious as to what
> > loopholes they're using. I've been taught a thimbleful of tax law but this
> > zero tax trick thus far escapes me.
> >
> > --A.
>You haven't looked very hard, have you Antoun? :-)
>Google on: corporations pay no taxes
>first result:
> 'Study Finds That Many Large Companies Pay No Taxes'
>That was fast.
>-Matt Jensen
> Seattle

Antoun Nabhan
VP of Finance & Business Development, Arrayex, Inc.

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