Back In The Tank With Fannie, Fred

–(– 01/02/2010 – Taxes industry news provided by Financial News USA. Fiscal Follies: While Americans are distracted by the holidays and a failed terror attack, Washington is giving another blank check to Fannie Mae and Freddie Mac. Say, isn’t this how we got into trouble before?

When Fannie Mae and Freddie Mac, the two bankrupt, government-sponsored mortgage companies, were first bailed out in 2008, Americans were stunned that they’d have to pony up $200 billion. But Congress and the White House assured us it was necessary.

But lo, this year, as Fannie and Freddie continued to deteriorate and their loan portfolios imploded, Treasury handed over another $200 billion.

Now, in a sneaky move made on Christmas Eve, Treasury lifted the $400 billion cap on borrowing by the two government-sponsored enterprises (GSEs), at least through 2012. So you, the taxpayer, are on the hook for their losses over that time — maybe longer.

It’s not chump change. [Read the full article]

GMAC Financial Services is expected to receive $3.5 billion more in federal aid to further stabilize the automotive lender, The Wall Street Journal reported Tuesday.

The announcement is expected within days and would coincide with GMAC taking more steps to absorb losses related to its mortgage operations, the newspaper reported, citing people familiar with the situation.

GMAC, which is based in Detroit, has received $12.5 billion in taxpayer money and is 35 percent owned by the federal government. Results of the federal government’s “stress tests” earlier this year demanded that GMAC raise an $11.5 billion capital cushion to help it weather further economic decline. GMAC was unable to raise the funds privately. [Read the full article]

A Connecticut congressman is among a group of federal lawmakers hoping to update the country’s “Buy American” laws to help struggling manufacturers.

Democratic U.S. Rep. Chris Murphy said Wednesday there are numerous loopholes in the laws that allow federal agencies to opt out from having to buy goods and services from domestic companies, enabling foreign companies to get the business instead.

“Those jobs are going elsewhere, funded by you and me, the taxpayers of this state and this nation,” said Murphy, who represents the 5th Congressional District.

Murphy, appearing at the state Capitol news conference, said he will introduce two bills in January that would update federal domestic sourcing statutes. He said a working group of congressional members, including many from the Midwest and Northeast regions, began meeting two months ago to discuss ways to retool the laws. [Read the full article]

Dear Tax Talk,Will I be subject to a tax penalty for not paying quarterly payments during the year if I elect to take a $30,000 required minimum distribution, or RMD, in December 2009? I did not need to pay any quarterly payments this year. I’m quite sure the added RMD will put me in a higher tax bracket.– Robert

Dear Robert,Uncle Sam wants its money and it wants it during the tax year, not after. When you underpay your current year tax bill, you could be subject to a penalty in the form of an interest charge unless you meet an exception.

There’s an exception if you paid in as much as the prior year’s tax or if you paid 90 percent of the current year’s tax. In either case, your payments of tax had to be paid evenly throughout the tax year to avoid penalty.

Your payments consist of tax withheld and supplemental payments made in the form of estimated tax payments. Tax withheld is treated as paid evenly throughout the year regardless of when it was withheld. [Read the full article] About Financial News USA

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