American International Group reported a $19.8 billion profit for its fourth quarter last week. But that doesn’t mean the company pulled a massive turnaround after its government bailout a few years ago.
Looking more closely at the numbers, it turns out $17.7 billion of that profit was actually a tax benefit from the U.S. government. What’s more, AIG won’t pay any taxes this year or for the next decade, according to some estimates.
The tax benefit is the result of some Congressional rule-bending that took place in 2008, allowing AIG and others to take massive net operating losses despite the government bailout.