Replies to post #7653 on Dime Bancorp Inc (fka DIMEQ)

[philipmax]

I would expect an answer on Mon the 20th.

[linda1]

The DOJ - Dept of Justice - has filed - on 07/20/15 - inquiries to JPM to answer about JPM's calculation of the Tax Gross - Up:


DOJ Inquiries Regarding Tax Gross-up Request – June 24, 2015

1. Please state whether you will stipulate that JPM will report its anticipated “taxable gain
of $197,986.963.33” and the amount of any tax gross-up awarded by the Court (which
you have estimated at $118,969,673.71) to the IRS as taxable income and will repay to
the Government any portion of the award that ultimately is not taxed. Please also state
when JPM anticipates paying the tax, e.g., in the first quarter following the award. This
Court has previously relied upon such representations for factual proof of the
appropriateness of a gross-up award. See Fifth Third Bank v. United States, 71 Fed. Cl.
56, 97 (2006).

2. Please provide a numerical breakdown of your calculation supporting your statement that
the “fair market value of the Anchor judgment that should be attributed to the purchase
price it paid for WMB's assets on the date that it acquired those assets was
$55,385,946.36. This calculation is based upon the market value of the Litigation
Tracking Warrants that were publically trading on the date of the acquisition.” Although
we have received the 8-K that contains the formula you represent was used, it is still
necessary for us to have the inputs (e.g., number of LTWs, dates of the market price of
LTWs, and treatment of the 85 percent figure, litigation and LTW expenses, and taxes in
your valuation formula), in order to confirm the calculation. See Washington Mutual,
Inc. Form 8-K (March 12, 2003) at 8.

3. Please provide a numerical breakdown of your calculation supporting your statement that
“JPMC has determined that 54.35% of the fair market value should be allocated to the
grossed up portion of the judgment for tax purposes. 54.35% of the determined fair
market value is $30,104,036.67. When this amount is deducted from the full amount of
the award subject to gross up, JPMC would experience a taxable gain of
$197,986,963.33.” In your numerical breakdown, please provide information including
the input numbers making up the numerator and denominator of the apportionment
fraction.

4. Please provide any documents supporting your statement that “JPMC's tax rate for 2015
is 37.535%,” e.g., internal JPM projections of JPM’s 2015 marginal tax rate. Also,
please provide a numerical breakdown of your statement that “Applying this rate to the
amount of the gain to be grossed up, results in a gross up of $118,969,673.71.”

5. Please provide any JPM accounting work papers regarding JPM’s assessment of the “fair
market value of the Anchor judgment that should be attributed to the purchase price it
paid for WMB’s assets,” including JPM’s assessment of the “fair market value of the
Anchor judgment” and its conclusion that “54.35% of the fair market value should be
allocated to the grossed up portion of the judgment for tax purposes.”

6. Please state whether, as stated in your 2010 gross-up reply motion, JPM plans to
“retroactively amend[] its Form 8594 for the 2008 tax year to allocate a portion of the
purchase price paid for Washington Mutual Bank’s assets to the Anchor judgment.” See
Reply in Support of Pl. Rule 60(b) Mot. for Award of a Tax Gross-up (Dkt. 338) (Oct. 7,
2010) at 3. Please also state whether JPM intends to reallocate basis and amend its 2008
or any other affected tax returns to reflect the reallocation of basis.