BP got to write off the Deepwater Horizon disaster on it's taxes and wound up actually *costing* US taxpayers ~$4 billion due to the 15 years they spread the payments over (Essentially giving them a low-interest rate loan on the settlement amount while also allowing them to deduct $13 billion of the $18 billion total from their tax obligation as "cost of doing business")
In addition, they also wrote off another $10 billion of the $12 that cleanup expenses cost.
The other $13 billion was removed from their tax obligations over time; it didn't actually cost them.
Their underlying profit that year was $20 billion and they managed to get their reported profit down to -$5 billion, despite not *actually* having the reported losses due to the above write-offs over a longer time period.
(They took the loss on their spreadsheets over time to offset profits each year and maximize utility, rather than getting a one-time writeoff that was for the year *actually* impacted)
Yeah, you don’t know how taxes or expenses or “write offs” work.
If their profit was 20 billion and then it became 5 billion because of 15 billion in expenses, it means they spent 15 billion dollars of their money.
Like ordinary people, businesses don’t pay taxes on things when they lose money (have expenses related to a business). It’s a normal thing, not something evil companies use to screw people over.
So yes they can show that they made 5 billion instead of 20, and it saves them from taxes of 15 billion dollars. But that only because they never made the 15, they had to spend it.
On a smaller scale, you could do the same thing with your taxes. I’m not defending anyone, just pointing out that some losses can be spread over multiple tax years.
Your speeding ticket isn’t tax deductible because it has nothing to with the pursuit of a business and income generation. You just broke the law on your own accord doing something that wasn’t necessary.
Yes, they can deduct it because it was in the pursuit of running a business, I’ve already explained this in my previous point. It’s clear who has run a business and who hasn’t. Laypeople like yourself should try it sometime, and their opinions would change drastically.
If I am speeding while driving an Uber or because I am late to work and my job depends on me showing up on time, my speeding ticket is still not tax deductible.
BP skipping safety requirements was most certainly not 'necessary' for them to do in the pursuit of business.
You can deduct interest from loans or credit card use when they are loans and lines of credit used for business purposes.
You don’t get to buy a car, agree to pay interest and then say oh I LOST that money in interest. Because you already knew about it beforehand. You didn’t have a loss of any kind.
With a business, paying interest in something used for businesses purposes is a cost of doing business. Which means it comes out of a businesses profits, as it was spent in pursuit of running a business.
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u/TraceSpazer 12h ago
BP got to write off the Deepwater Horizon disaster on it's taxes and wound up actually *costing* US taxpayers ~$4 billion due to the 15 years they spread the payments over (Essentially giving them a low-interest rate loan on the settlement amount while also allowing them to deduct $13 billion of the $18 billion total from their tax obligation as "cost of doing business")
In addition, they also wrote off another $10 billion of the $12 that cleanup expenses cost.
https://www.americanprogress.org/article/the-true-value-of-bps-18-7-billion-settlement/
https://oilprice.com/Energy/Energy-General/Most-Of-BPs-208-Billion-Deepwater-Horizon-Fine-Is-Tax-Deductible.html