BP hopes to get a $ 10 billion tax credit considering the losses they’ve taken; $ 17 billion within the second quarter and $ 32 billion in cleanup costs. Companies that have really big problems get this kind of cash loan advance given to them. It is nevertheless argued how legal this tax credit really is. The government is going to end up paying more for the cleanup of the oil spill than they intended with tax credits like this. Source of article – BP preparing to take a $ 10 billion tax credit by Personal Money Store.
BP tax credit
Companies with a lot of financial trouble can, according to the IRS, take out a tax credit. BP lost $ 17 billion in just the second quarter of this year. Most of this loss is from the falling prices of BP stock. BP hasn’t needed to borrow any money yet, although it is losing quite a bit of money.
BP tax credit effecting things
With a $ 10 billion tax credit, the government will end up paying of BP’s bill when it comes to the oil spill cleanup. BP said they’d pay at least $ 20 billion for the oil spill. If the government gives BP $ 10 billion, then the government essentially paid half of that bill.
No BP tax credit
Press Secretary Robert Gibbs said in reference to the BP tax credit, “I do not think anybody would prefer that [BP] do that.”. The only thing that compares is when Goldman Sachs tried to write off the $ 535 million penalty fee they paid to the SEC. No other company has ever tried applying for loans till payday and then trying to write those loans off like this.
Why to give BP the tax credit
There might really be a reason to give BP this tax credit. All cleanup bills for the cleanup can be paid by BP. Unless BP can stay solvent, then getting the quick money loan needed for the cleanup could possibly be practically impossible. If BP can’t discover a way to keep in business without the $ 10 billion, then they’d likely go out of business and be unable to pay for any of the expenditures of the oil spill cleanup. If they are in that situation or not, though, is going to be up to the IRS investigation.
Discover more info on this subject
Daily Finance
dailyfinance.com/story/taxes/bp-claiming-9-9b-tax-credit-on-gulf-clean-up-costs/19571518/
Market Watch
miamiherald.com/2010/07/28/1749344/bp-eyes-10b-tax-credit-over-gulf.html#ixzz0uyReljAI
