Ameriprise 2009 Annual Report Download - page 67
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securities that we purchased from various 2a-7 money market mutual funds managed by RiverSource Investments, LLC, $36 million in
costs related to guaranteeing specific client holdings in an unaffiliated money market mutual fund and $60 million in restructuring
charges. The positive impact of foreign currency translation on general and administrative expense in 2009 partially offset the negative
impact of foreign currency translation on management and financial advice fees.
Income Taxes
Our effective tax rate was 19.9% for the year ended December 31, 2009, compared to 78.4% for the year ended December 31, 2008. Our
effective tax rate for the year ended December 31, 2008 reflects the level of pretax income relative to tax advantaged items and $79 million
in tax benefits related to changes in the status of current audits and closed audits, tax planning initiatives, and the finalization of prior
year tax returns.
On September 25, 2007, the Internal Revenue Service (‘‘IRS’’) issued Revenue Ruling 2007-61 in which it announced that it intends to
issue regulations with respect to certain computational aspects of the Dividends Received Deduction (‘‘DRD’’) related to separate account
assets held in connection with variable contracts of life insurance companies. Revenue Ruling 2007-61 suspended a revenue ruling issued
in August 2007 that purported to change accepted industry and IRS interpretations of the statutes governing these computational
questions. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at
which time insurance companies and other members of the public will have the opportunity to raise legal and practical questions about
the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown
at this time, but they may result in the elimination of some or all of the separate account DRD tax benefit that we receive. Management
believes that it is likely that any such regulations would apply prospectively only. Additionally, included in the Administration’s 2011
Revenue Proposals is a provision to modify the DRD for life insurance companies separate accounts, which if enacted could significantly
reduce the DRD tax benefits the Company receives, prospectively, beginning in 2011. For the year ended December 31, 2009, we recorded
a benefit of approximately $62 million related to the current year’s separate account DRD.
52 ANNUAL REPORT 2009