WASHINGTON — The government bailout of General Motors includes a valuable prize for the ailing carmaker: a tax break that could save GM and its future investors more than $12 billion — if it ever becomes profitable again.
U.S. taxpayers are about to become majority shareholders in GM, acquiring more than 70 percent of the company in exchange for billions of dollars in aid.
Under ordinary circumstances, an ownership change like that would trigger a big tax hit for a money-losing corporation like GM, severely limiting its ability to use current losses to lower future tax bills.
But these are not ordinary times. The Treasury Department has, in effect, suspended long-standing tax rules for companies that receive bailout money, providing benefits not available to firms that don’t receive government help. New Treasury rules could provide GM billions in tax breaks once it becomes profitable and starts paying taxes again, which could be years away.
Treasury officials say they are reluctant GM owners and hope to sell the government’s share in the company as soon as possible.
When they do, the tax breaks could become a lure for potential buyers.
