Morgan Stanley To Take $1.25 Billion Hit In Fourth-quarter From Tax Invoice

(P3P) – Morgan Stanley (MS.N) mentioned on Friday it might take a $1.25 billion hit in its fourth-quarter earnings as a result of a minimize in company tax price as a part of the U.S. tax code overhaul.

The web blow of the invoice to the financial institution will embody a few $1.four billion internet discrete tax provision, primarily because of the remeasurement of sure internet deferred tax property utilizing the lowered company tax price, the corporate mentioned in a submitting.

It could be offset by $160 million in different optimistic results, Morgan Stanley added.(

The sweeping tax code adjustments enacted in late December cuts the company tax price to 21 p.c from 35 p.c and had been anticipated to imply short-term ache, however long-term acquire for U.S.-based firms.

Scores of enormous corporations, together with large banks resembling Citigroup (C.N) and JPMorgan Chase & Co (JPM.N), have socked away an estimated $2.eight trillion abroad in recent times.

The one-time tax on these earnings is anticipated to lift $339 billion in federal revenues over the approaching decade, based on the Joint Committee on Taxation (JCT), a nonpartisan analysis arm of the U.S. Congress.

Morgan Stanley’s arch rival Goldman Sachs Group Inc (GS.N) had mentioned on Dec. 29 it expects its fourth-quarter earnings to lower by about $5 billion as a result of repatriation tax, the price of transferring cash from overseas nations to the U.S., Goldman mentioned in a submitting.

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