Replies to post #458618 on Mr Cooper Group Inc (COOP)

[Evintos]

The reduction from 8 billion to 6 billion was due to ownership change limiting use and letting it expire. It's stated in the 10-Q.

Link to the most recent 10-Q

http://ih.advfn.com/p.php?pid=nmona&article=72153905

On March 19, 2012, WMIH emerged from bankruptcy. Prior to emergence, WMI abandoned the stock of WMB, thereby generating a worthless stock deduction of approximately $8.37 billion which gave rise to a NOL for the year ended December 31, 2012. Under Section 382 of the Code, and based on the Company’s analysis, we believe that the Company experienced an “ownership change” (generally defined as a greater than 50% change (by value) in our equity ownership over a three-year period) on March 19, 2012, and our ability to use our pre-ownership change NOLs and other pre-change tax attributes against our post-change income was limited. The Section 382 limitation is applied annually so as to limit the use of our pre-change NOLs to an amount that generally equals the value of our stock immediately before the ownership change multiplied by a designated federal long-term tax-exempt rate. Due to applicable limitations under Section 382 and a reduction of tax attributes due to cancellation of indebtedness, a portion of these NOLs were limited and will expire unused. We believe that the total available and utilizable NOL carry forward at December 31, 2015 is approximately $6.0 billion. At June 30, 2016, there was no limitation on the use of these NOLs. These NOLs will begin to expire in 2031. The Company’s ability to utilize the NOLs or realize any benefits related to the NOLs is subject to a number of risks. (see Part I-Item 1A. Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2015).

[bkshadow]

The WMI basis in WMB is expressed in both...

...terms of "book basis" and "tax basis."

...only "tax basis" losses are deductible (i.e., that is why they are identified as "tax basis.")

...comments in red.

CBA09 Friday, 08/12/16 10:31:51 AM
Re: bkshadow post# 458598
Post #
458618
of 458622 Go
$8.37B WMB Worthless Stock Loss on...

Ok, then -
From what you reflected the above $ 8.37 was the total usable Tax Loss. This was from a $ 24 B "Realized Investment Loss" on books.

...tax versus book is likely not much different; the $24B investment in subsidiaries asserted would be YEARS before the Abandonment of WMB by WMI.

...also, it is extremely important to note that the Net Operating Loss in 2008 of WMB 'caused by the seizure was significantly used up; such NOL was carried back 5-years under the tax regulation change that freed up the significant NOL refunds.

So was the difference - $ 2.4 a "tax refund" applied toward prior tax years, ( $8.37 vs. $ 5.97B )?

...the difference, as outlined in the AUDITS and SEC filings, have to do with the tax regulation to PRO-RATE the ordinary loss per the PLR over the post abandonment days / 365.

...as such, the $8.37 was PRO-RATED to $5.97B.


This would make sense and WMI followed the accounting regulations of consolidation therefore "deferring worthless stock treatment / abandonment."

...the stock basis (tax and book), and the underlying value of the unrestricted NOL potential of $9B or more, was part of shareholders objections and communications to the EC prompting them to retain BDO for the NOL WMIH valuation adversary.