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PulteGroup, Inc. Message Board

  • rajoilprasad rajoilprasad Jan 30, 2008 8:23 PM Flag

    Why 400+ MM$ of tax liability

    when they actually lost money. I would imagine they would have tax credit? Can anybody explain?

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    • I don't see what you see. There's no tax liability on their balance sheet in the $440+ M range. Its about $170M. Tax and GAAP accounting use different basis. Tax is largely cash based, while GAAP is accrual based. Much of their losses were attributable to non-cash accruals (impairments, non-cash write-offs etc.) They don't get to deduct these for tax purposes in the current period, but they may be able to in a future period when those assets are sold for cash...that is assuming they have profits to offset these deductions in future periods. For the moment, some of these "deferred tax assets" are sitting on the balance sheet (assets section) until they can deduct in future years. As you might have noticed, they booked a huge valuation allowance on much of their deferred tax assets (600M+), which is essentially a write off, because they believe those potential tax deductions (e.g. loss carryforwards) may not be deductible if they don't turn profitable prior to the expiration of the tax deductions.

 
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