Ally Bank 2012 Annual Report Download - page 174

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The significant components of deferred tax assets and liabilities are reflected in the following table.
December 31, ($ in millions) 2012 2011
Deferred tax assets
Tax credit carryforwards $ 1,631 $ 161
Tax loss carryforwards 1,025 1,976
Mark-to-market on consumer finance receivables and loans 880 695
Equity investment in ResCap 486 —
Provision for loan losses 306 775
Hedging transactions 267 280
State and local taxes 263 186
ResCap settlement accrual 262 —
Sales of finance receivables and loans 206 182
Unearned insurance premiums 142 158
Contingency reserves 19 169
Other 247 568
Gross deferred tax assets 5,734 5,150
Valuation allowance (1,653) (2,274)
Net deferred tax assets 4,081 2,876
Deferred tax liabilities
Lease transactions 1,756 2,052
Basis difference in subsidiaries 454 —
Deferred acquisition costs 333 328
Debt transactions 226 32
Unrealized gains on securities 16 180
Other 112 157
Gross deferred tax liabilities 2,897 2,749
Net deferred tax assets $ 1,184 $ 127
At December 31, 2012, we had U.S. federal and state net operating loss carryforwards and capital loss carryforwards. The federal net
operating loss carryforwards of $668 million expire in the years 2025–2031. The federal capital loss carryforwards of $2.2 billion expire in
the years 2014–2017. The corresponding expiration periods for the state net operating loss carryforwards of $1.7 billion and capital loss
carryforwards of $3.1 billion are 2014–2032 and 2014–2017, respectively. Additionally, U.S. foreign tax credit carryforwards of $1.6 billion
are available as of December 31, 2012, and expire in the years 2013–2022.
Foreign pretax income is subject to U.S. taxation when effectively repatriated. Before the third quarter of 2012, we fully provided for
federal income taxes on the undistributed earnings of foreign subsidiaries except to the extent those earnings were indefinitely reinvested
outside the United States. As of December 31, 2012, however, we no longer assert that any foreign earnings are indefinitely reinvested outside
of the United States. This change in assertion is primarily due to the fact that agreements to sell our international operations were signed
during the fourth quarter of 2012. These sales will be taxable in the United States in future periods and will result in the effective repatriation
of foreign earnings. As a result of this change in assertion, all deferred tax liabilities for incremental U.S. tax that stem from temporary
differences related to investments in foreign subsidiaries or foreign corporate joint ventures have been recognized as of December 31, 2012.
Table of Contents
Notes to Consolidated Financial Statements
Ally Financial Inc. • Form 10-K