FDIC No Longer Supporting $1.4 Billion Tax Break Benefitting JP Morgan (JPM)

3/29/2010- The Federal Deposit Insurance Corp. has stopped supporting a $1.4 billion tax break benefitting J.P. Morgan Chase JPM, according to a Wall Street Journal report.

The tax benefit is related to J.P. Morgan's acquisition of Washington Mutual and part of the bankruptcy proceedings of the failed Seattle thrift's parent company.

WaMu is eligible for $2.7 billion to $2.8 billion in refunds based on a 2009 economic stimulus bill that allowed companies to apply losses from 2008 and 2009 against taxes paid in the previous five years.

Under the bankruptcy plan, J.P. Morgan was in position to claim as much as $1.4 billion from an FDIC receivership, with the holding company's creditors getting a majority of the remainder of the refund.

However, the holding company said that the FDIC "has not agreed to all of the provisions" but said "discussions are ongoing."

A spokesperson for the FDIC said that the bankruptcy documents "do not reflect the continuing discussions among the parties."

Write to Chip Brian at cbrian@tradethetrend.com

---------------------------------------------------------------------------------------------

SmarTrend analyzes over 5,000 securities simultaneously throughout the trading day and provides its subscribers with trend change alerts in real time. To get a free trial of our trading calls and maximize your trading results, please visit http://www.TradeTheTrend.com

Get exclusive, actionable insight into how the market is expected to trend prior to market open with our free morning newsletter. Sign up at: http://www.TradeTheTrend.com/signup