Book Minimum Tax Blunts Some Federal Rescue Tools, Banks Warn

Language in the corporate alternative minimum tax changes the way gains from federal financial assistance from the Federal Deposit Insurance Corporation are taxed in a way that could blunt future efforts to stave off banking crises such as the one seen last spring.

The current corporate alternative minimum tax language would tax gains from FDIC federal financial assistance in a way that could slam the FDIC’s Deposit Insurance Fund and discourage some lenders from taking part in FDIC-assisted transactions. Taxing the assistance all at once could mean banks need more FDIC help to make the math work on deals—effectively sending ...