JPMorgan Chase & Co. (NYSE: JMP) is close to a deal that gives the financial giant a $1.4 billion tax refund, even though it received a $25 billion bailout in 2008. JPMorgan is the latest company to take advantage of the tax refund, which is giving billions to everyone from retailers and airlines to energy companies and homebuilders.
A little-known provision in a November addition to the 2009 stimulus bill allows companies to apply losses from 2008 and 2009 to taxes paid up to five years ago, expanding the usual two-year limit. The " net operating loss carryback" extends the timeframe into years when companies were profiting and had to pay in each tax season.
Although companies that received Troubled Asset Relief Program (TARP) aid are not eligible for the tax break - and JPMorgan nabbed a hefty $25 million of those funds - JPMorgan is gunning for part of Washington Mutual Bank's $2.6 billion refund. JPMorgan bought the financial institution's banking operations for $1.9 billion in September 2008, after WaMu became the biggest bank failure in U.S. history and was seized by the Federal Deposit Insurance Corporation (FDIC).