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First comes the settlement. Next comes the tax write-off?
Standard & Poor’s Ratings Services on Tuesday announced a record $1.5 billion payout to resolve crisis-era lawsuits with the Justice Department, states and a pension fund over inflated residential mortgage deals. Collectively, the settlement total is 10 times larger than any other previously involving a credit-rating firm.
But how much of the unprecedented round of settlements could end up being written off?
Michelle Surka, a program associate with the nonpartisan consumer advocacy group U.S. Public Interest Research Group, said she thinks she has an answer based on an early analysis: about $290 million.
That’s about a $50 million break on state taxes but also the potential to write down $240 million of federal taxes owed in the more than dozen states involved in the settlement, Ms. Surka said.
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