Comment on Deferred Tax Assets: What Are They and Why Do They Matter for Banks?

Deferred Tax Assets: What Are They and Why Do They Matter for Banks?

A bank never wants to lose money, but there can be an upside to doing so if the loss creates a deferred tax asset, which allows a company to offset future income with previously unclaimed losses for the purposes of calculating federal income taxes.These seemingly esoteric assets are both easy to understand and very important right now for two of the nation's biggest banks: Bank of America (NYSE: BAC) and Citigroup (NYSE: C).Deferred tax assets generally don't play a major role at consistently profitable companies.

 

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