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This excerpt taken from the ALL 10-Q filed May 7, 2009. DEFERRED TAXES
We evaluate whether a valuation allowance for our deferred tax assets is required each reporting period. A valuation allowance is established if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. In determining whether a valuation allowance is needed, all available evidence is considered. This includes the potential for capital and ordinary loss carryback, future reversals of existing taxable temporary differences, tax planning strategies and future taxable income exclusive of reversing temporary differences.
With respect to our evaluation of the need for a valuation allowance related to the deferred tax asset on unrealized losses on fixed income securities, we rely on our assertion that we have the intent and ability to hold the securities to recovery. As a result, the unrealized losses on these securities would not be expected to materialize and no valuation allowance on the associated deferred tax asset is needed.
With respect to our evaluation of the need for a valuation allowance related to other capital losses that have not yet been recognized for tax purposes, we utilize prudent and feasible tax planning strategies. These include strategies that optimize the ability to carry back capital losses as well as the ability to offset future capital losses with capital gains that could be recognized for tax purposes. We have remaining capital loss carryback capacity of $1.44 billion from 2007.
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The total deferred tax valuation allowance is $379 million at March 31, 2009 compared to $49 million at December 31, 2008. Included in the $379 million valuation allowance at March 31, 2009 is $370 million relating to the deferred tax asset on capital losses that have not yet been recognized for tax purposes. The increase of $330 million during the first quarter of 2009 includes $254 million that is recorded as income tax expense on the Condensed Consolidated Statements of Operations and $76 million that is included as a component of accumulated other comprehensive income on the Condensed Consolidated Statements of Financial Position as of March 31, 2009. Of the $254 million, $142 million is attributable to Allstate Financial, resulting from investment write-downs that are not currently deductible for tax purposes. $112 million is attributable to Property-Liability, relating to unrealized losses on equity securities as of December 31, 2008 for which we are no longer able to demonstrate a tax planning offset with future capital gains. The increase of $76 million recorded as a charge to other comprehensive income is primarily attributable to Property-Liability and resulted from an increase in unrealized capital losses on equity securities.
These excerpts taken from the ALL 10-K filed Feb 26, 2009. DEFERRED TAXES The total deferred tax valuation allowance is $49 million at December 31, 2008. We evaluate whether a valuation allowance is required each reporting period. A valuation allowance is established if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized. In determining whether a valuation allowance is needed, all available evidence is considered. This includes the potential for capital and ordinary loss carryback, future reversals of existing taxable temporary differences, tax planning strategies and future taxable income exclusive of reversing temporary differences. With respect to our evaluation of the need for a valuation allowance related to the deferred tax asset on unrealized losses on fixed income securities, we rely on our assertion that we have the intent and ability to hold the securities to recovery. As a result, the unrealized losses on these securities would not be expected to materialize and no valuation allowance on the associated deferred tax asset is needed. With respect to our evaluation of the need for a valuation allowance related to other capital losses that have not yet been recognized for tax purposes, we utilize prudent and feasible tax planning strategies. These include strategies that optimize the ability to carry back capital losses as well as the ability to offset future capital losses with capital gains that could be recognized for tax purposes. We have remaining capital loss carryback capacity of $1.50 billion from 2007. Included in the $49 million valuation allowance at December 31, 2008 is $40 million relating to the deferred tax asset on capital losses that have not yet been recognized for tax purposes. 127 DEFERRED TAXES The total deferred tax valuation allowance is $49 million at December 31, 2008. We evaluate whether a valuation allowance With With 127 | EXCERPTS ON THIS PAGE:
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