Citibank 2013 Annual Report Download - page 217

199
Based upon the foregoing discussion, Citi believes the U.S. federal and
New York state and city NOL carry-forward period of 20 years provides
enough time to fully utilize the DTAs pertaining to the existing NOL carry-
forwards and any NOL that would be created by the reversal of the future net
deductions that have not yet been taken on a tax return.
The U.S. FTC carry-forward period is 10 years and represents the most
time-sensitive component of Citi’s DTAs. Utilization of FTCs in any year is
restricted to 35% of foreign source taxable income in that year. However,
overall domestic losses that Citi has incurred of approximately $64 billion as
of December 31, 2013 are allowed to be reclassified as foreign source income
to the extent of 50% of domestic source income produced in subsequent years.
Such resulting foreign source income would cover the FTCs being carried
forward. As such, Citi believes the foreign source taxable income limitation
will not be an impediment to the FTC carry-forward usage, as long as Citi
can generate sufficient domestic taxable income within the 10-year carry-
forward period.
As noted in the tables above, Citi’s FTC carry-forwards were $19.6 billion
as of December 31, 2013, compared to $22.0 billion as of December 31, 2012.
This decrease represented $2.4 billion of the $2.5 billion decrease in Citi’s
overall DTAs during 2013. Citi believes that it will generate sufficient
U.S. taxable income within the 10-year carry-forward period referenced
above to be able to fully utilize the FTC carry-forward, in addition to any
FTCs produced in such period, which must be used prior to any carry-
forward utilization.