BP to take $10 billion tax write-off for cleanup

[Hannah Bell]

BP on Tuesday announced its intention to take $10 billion in US tax write-offs related to the cost for response and cleanup of the Gulf oil catastrophe.

The oil giant penciled in losses of $32.2 billion for its second quarter earnings statement. These include $2.9 billion for its response so far and $29.3 billion in future estimated costs that the company says will cover all further damages associated with the spill.

BP will be able to write off $10 billion in US taxes based on the claimed loss. It will also be able to write off an undetermined amount from taxes owed to the United Kingdom, where it is based.

Included in the future costs is the $20 billion BP must provide to the Independent Claims Facility escrow fund established by the Obama administration. It has yet to provide the fund with any money, “claims czar” Kenneth Feinberg admitted this week.

http://www.wsws.org/articles/2010/jul2010/spil-j28.shtml

[kestrel91316]

1. The cleanup expenses ARE a legitimate cost of doing business.

However, to take the write-off for funding the escrow fund BEFORE HAVING FUNDED IT is just plain dishonest.

[AlabamaLibrul]

2. Is it still a legitimate cost of doing business....

If gross negligence (cutting corners, disabling alarms, etc.) is laid on them in a formal manner, such as the EPA's fine increase from $1100 to $4500 per barrel if that is found to be the case?

Agree about the dishonesty of writing-off before actually paying the expense, not sure how it stands with regard to my question though.

[uncommon]

4. That would be my question.

If it's negligence, it shouldn't be written off.

If it's happenstance and they did everything right and an accident just happened, then fine.

[kestrel91316]

5. Now that you put it that way, lol, I suppose if the gross negligence

could be proven then it's basically criminal, and so in my heart I don't believe it SHOULD be legitimately deductible. But I don't think that's how the tax laws work, sadly.

[dipsydoodle]

3. 1st escrow a/c payment

not due until 3rd quarter 2010. That was the deal - $5 billion then and balance over 4 years.

see here : http://www.ft.com/cms/s/0/52b23b50-7951-11df-92c1-00144feabdc0.html

Aside from that what BP are doing with regard making the provision for the whole lot now apparently complies with your Federal laws. :shrug:

[maryf]

6. K&R for the morning crowd...nt