Beazer Homes (BZH) Files for $101M Federla Income Tax Refund
Beazer Homes USA, Inc. (NYSE: BZH) today announced that it filed an application for a federal income tax refund of approximately $101 million as a result of tax legislation enacted during the quarter ending December 31, 2009. This legislation permitted a five year carryback of tax losses incurred in certain defined periods. Additionally, the Company expects to record a benefit of approximately $101 million to shareholders’ equity (approximately $2.50 per common share) in the quarter ending December 31, 2009 and to receive the refund proceeds in cash during the quarter ending March 31, 2010.
As part of its tax refund filing, the Company has elected to defer taxes on gains arising from the cancellation of indebtedness associated with the Company’s previously reported buy back of certain senior notes. This deferral is permitted under The American Recovery and Reinvestment Act of 2009 and represents approximately $51 million of incremental tax benefit to the Company arising from $148 million of gains previously recognized. Taxes owed on the deferred gains will be repayable starting in five equal annual installments beginning in fiscal 2014 and will not result in a reduction to shareholders’ equity at that time.
The Company previously disclosed that its estimated benefit of applying the five year carryback legislation discussed above was approximately $50 million. Our subsequent decision to elect to defer taxes on the gains arising from the cancellation of indebtedness increased the benefit to approximately $101 million. This decision was reached upon consultation with external tax advisors.
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