Related Organizations

Taxes

A holding company and its banking subsidiaries often will file a consolidated income tax return. However, each bank is viewed as, and reports as, a separate legal and accounting entity for regulatory purposes. Accordingly, the accrual of the current and deferred portions of each bank’s applicable income taxes, reflecting either an expense or benefit, should be recorded as if the institution had filed as a separate entity. Furthermore, the amount and timing of payments or refunds should be no less favorable to the subsidiary than if it were a separate taxpayer. Any practice undertaken by a bank or holding company that is not consistent with this policy may be viewed as an unsafe and unsound practice prompting either informal or formal corrective action.

See the interagency policy statement "Income Tax Allocation in a Holding Company Structure" for additional information.

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