Morgan Stanley said on Friday it would take a $1.25 billion hit in its fourth-quarter earnings due to a cut in the corporate tax rate as part of the U.S. tax code overhaul. The net blow of the bill to the bank will include about a $1.4 billion net discrete tax provision, mainly due to the remeasurement of certain net deferred tax assets using the lowered corporate tax rate, the company said in a filing.
It would be offset by $160 million in other positive effects, Morgan Stanley added.
The sweeping tax code changes enacted in late December cuts the corporate tax rate to 21 percent from 35 percent and were expected to mean short-term pain, but long-term gain for U.S.-based corporations.
The one-time tax on those earnings is expected to raise $339 billion in federal revenues over the coming decade, according to the Joint Committee on Taxation, a nonpartisan research arm of the U.S. Congress.
Morgan Stanley's arch rival Goldman Sachs had said on Dec. 29 it expects its