XML 47 R32.htm IDEA: XBRL DOCUMENT v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The significant components of income tax expense from continuing operations were as follows.
Year ended December 31, ($ in millions)
202120202019
Current income tax expense (benefit)
U.S. federal$502 $— $(2)
Foreign4 6 4 
State and local168 80 65 
Total current expense674 86 67 
Deferred income tax expense (benefit)
U.S. federal151 280 178 
Foreign— 1 2 
State and local(35)(39)(1)
Total deferred expense116 242 179 
Total income tax expense from continuing operations$790 $328 $246 
A reconciliation of income tax expense from continuing operations with the amounts at the statutory U.S. federal income tax rate is shown in the following table.
Year ended December 31, ($ in millions)
202120202019
Statutory U.S. federal tax expense$810 $297 $413 
Change in tax resulting from
State and local income taxes, net of federal income tax benefit106 36 50 
Valuation allowance change, excluding expirations(78)(3)(219)
Tax credits, excluding expirations(58)(29)(27)
Nondeductible expenses30 37 29 
Other, net(20)(10)— 
Total income tax expense from continuing operations$790 $328 $246 
For the year ended December 31, 2021, consolidated income tax expense from continuing operations was largely driven by pretax earnings for the year, partially offset by a tax benefit from the release of valuation allowance on foreign tax credit carryforwards during the second quarter of 2021. For the year ended December 31, 2020, consolidated income tax expense from continuing operations was largely driven by pretax earnings for the year. For the year ended December 31, 2019, consolidated income tax expense from continuing operations was driven by pretax earnings for the year, partially offset by the release of valuation allowance on foreign tax credit carryforwards during the second quarter of 2019.
As of each reporting date, we consider existing evidence, both positive and negative, that could impact our view with regard to future realization of deferred tax assets. We continue to believe it is more likely than not that the benefit for certain foreign tax credit carryforwards and state net operating loss carryforwards will not be realized. In recognition of this risk, we continue to provide a partial valuation allowance on the deferred tax assets relating to these carryforwards and it is reasonably possible that the valuation allowance may change in the next 12 months.
The significant components of deferred tax assets and liabilities are reflected in the following table.
December 31, ($ in millions)
20212020
Deferred tax assets
Tax credit carryforwards$1,014 $1,786 
Adjustments to loan value920 923 
U.S. federal tax loss carryforwards (b)256 — 
State and local taxes233 191 
Other604 366 
Gross deferred tax assets3,027 3,266 
Valuation allowance(839)(835)
Deferred tax assets, net of valuation allowance2,188 2,431 
Deferred tax liabilities
Lease transactions1,385 1,809 
Deferred acquisition costs403 391 
Other156 229 
Gross deferred tax liabilities1,944 2,429 
Net deferred tax assets (a)$244 $2 
(a)Amounts include $254 million and $94 million of net deferred tax assets included in other assets on our Consolidated Balance Sheet for tax jurisdictions in a total net deferred tax asset position at December 31, 2021, and 2020, respectively, and $10 million and $92 million included in accrued expenses and other liabilities on our Consolidated Balance Sheet for tax jurisdictions in a total net deferred tax liability position.
(b)Primarily the result of a 100% bonus depreciation election for 2021 operating lease originations.
The following table summarizes net deferred tax assets including related valuation allowances at December 31, 2021.
($ in millions)Deferred tax asset (liability)Valuation allowanceNet deferred tax asset (liability)Years of expiration
Tax credit carryforwards
Foreign tax credits$1,014 $(709)$305 2022–2031
Tax loss carryforwards
Net operating losses — federal256 (a)— 256 2027–Indefinite
Net operating losses — state166 (b)(130)36 2022–Indefinite
Total U.S. federal and state tax loss carryforwards422 (130)292 
Other net deferred tax liabilities(353)— (353)n/a
Net deferred tax assets (liabilities)$1,083 $(839)$244 
(a)Federal net operating loss carryforwards are included in the U.S. federal tax loss carryforwards total disclosed in our deferred inventory table above.
(b)State net operating loss carryforwards are included in the state and local taxes and other liabilities totals disclosed in our deferred inventory table above.
As of December 31, 2021, we have recognized negligible deferred tax liabilities for incremental U.S. federal taxes that stem from temporary differences related to investment in foreign subsidiaries or corporate joint ventures as there is no assertion of indefinite reinvestment outside of the United States.
The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits.
($ in millions)202120202019
Balance at January 1,$53 $48 $44 
Additions based on tax positions related to the current year— — — 
Additions for tax positions of prior years7 5 11 
Reductions for tax positions of prior years(7)— (5)
Settlements— — (2)
Expiration of statute of limitations— — — 
Balance at December 31,$53 $53 $48 
Included in the unrecognized tax benefits balances are some items, the recognition of which would not affect the effective tax rate, such as the tax effect of certain temporary differences and the portion of gross state unrecognized tax benefits that would be offset by the tax benefit of the associated U.S. federal deduction. The balance of unrecognized tax benefits that, if recognized, would affect our effective tax rate is $42 million for both the years ended December 31, 2021, and 2020 and $38 million for the year ended December 31, 2019.
We recognize accrued interest and penalties related to uncertain income tax positions in interest expense and other operating expenses, respectively. For each of the years ended December 31, 2021, 2020, and 2019, the cumulative accrued balance for interest and penalties was $1 million or less and interest and penalties of less than $1 million were accrued each year.
It is reasonably possible that the unrecognized tax benefits will decrease by up to $52 million over the next 12 months if certain tax matters ultimately settle with the applicable taxing jurisdictions.
We file tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. Our most significant operations are in the United States and Canada. The oldest tax years that remain subject to examination for those jurisdictions are 2018 and 2011, respectively.