Sloan: Another clever GE deal highlights flaws of the corporate tax code

A general electric building in Schenectady, New York | Photo courtesy of Creative Commons
A general electric building in Schenectady, New York. | Courtesy of Creative Commons

General Electric is breaking itself into pieces these days, but its famous tax department is still intact.

You can see that from a pending transaction that would allow GE to finish extracting $23.5 billion of value by unloading one of its businesses — without paying a penny of income tax on the approximately $4.6 billion of profit that it would show shareholders if the deal were completed today.

Yes, I know this sounds confusing. But please bear with me as I tell you about GE, its soon-to-be-former subsidiary named Synchrony Financial and a tax-efficient, corporate-mainstream transaction called a split-off.

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Allan Sloan is a columnist for The Washington Post. He is a seven-time winner of the Loeb Award, business journalism’s highest honor. View Archive

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