Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Major Jurisdictions

The following are the major jurisdictions in which Ambac operates and the earliest tax years subject to examination:

Jurisdiction	Tax Year
United States	2010
New York State	2013
New York City	2015
United Kingdom	2016
Italy	2015

Significant Portions of Deferred Tax Liabilities and Deferred Tax Assets

The tax effects of temporary differences that give rise to significant portions of the deferred tax liabilities and deferred tax assets at December 31, 2019 and 2018, are presented below:

December 31,	2019		2018
Deferred tax liabilities:
Insurance intangible	$	90	$	151
Variable interest entities	12		19
Investments	32		26
Unearned premiums and credit fees	42		48
Other	8		8
Total deferred tax liabilities	183		252
Deferred tax assets:
Net operating loss and capital carryforward	742		719
Loss reserves	148		227
Debentures	29		23
Compensation	7		10
Other	1		2
Subtotal deferred tax assets	927		980
Valuation allowance	777		768
Total deferred tax assets	151		212
Net deferred tax liability	$	32	$	40

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

U.S. and foreign components of pre-tax income (loss) were as follows:

Year Ended December 31,	2019			2018		2017
U.S.	$	(174	)	$	264	$	(451	)
Foreign	(9		)	8		167
Total	$	(183	)	$	273	$	(284	)

Schedule of Components of Income Tax Expense (Benefit)

he components of the provision (benefit) for income taxes were as follows:

Year Ended December 31,	2019			2018			2017
Current taxes
U. S. federal	$	—		$	(2	)	$	(30	)
U.S. state and local	(3		)	2			2
Foreign	37			(1		)	41
Total current taxes	34			—			13
Deferred taxes
Foreign	(1		)	5			31
Total deferred taxes	$	(1	)	$	5		$	31
Provision for income taxes	$	32		$	5		$	44

Schedule Of Income Taxes Charged Credited Directly To Equity

The total effect of income taxes on net income and stockholders’ equity for the years ended December 31, 2019, 2018 and 2017 is as follows:

Year Ended December 31,	2019			2018			2017
Total income taxes charged to net income	$	32		$	5		$	44
Income taxes charged (credited) to stockholders’ equity:
Unrealized gains (losses) on investment securities	14			12			(31		)
Unrealized gains (losses) on foreign currency translations	—			—			26
Valuation allowance to equity	(23		)	(9		)	5
Total charged to stockholders’ equity:	(8		)	3			—
Total effect of income taxes	$	24		$	8		$	44

Schedule of Effective Income Tax Rate Reconciliation

The tax provisions in the accompanying Consolidated Statements of Total Comprehensive Loss reflect effective tax rates differing from prevailing Federal corporate income tax rates. The following is a reconciliation of these differences:

	2019					2018					2017
Year Ended December 31,	Amount			%		Amount			%		Amount			%
Tax on income from continuing operations at statutory rate	$	(38	)	21.0	%	$	57		21.0	%	$	(99	)	35.0	%
Changes in expected tax resulting from:
Tax-exempt interest	(3		)	1.8	%	(7		)	(2.5	)%	(6		)	2.1	%
Foreign taxes	40			(22.1	)%	10			3.9	%	(18		)	6.2	%
Substantiation adjustment	28			(15.3	)%	(60		)	(22.0	)%	36			(12.7	)%
Valuation allowance	8			(4.4	)%	5			1.9	%	128			(44.9	)%
Change in Tax Law	—			—	%	(2		)	(0.7	)%	2			(0.7	)%
Other, net	(2		)	1.3	%	1			0.4	%	2			(0.7	)%
Tax expense on income from continuing operations	$	32		(17.7	)%	$	5		2.0	%	$	44		(15.7	)%

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the beginning and ending amounts of material unrecognized tax benefits for 2019, 2018 and 2017 is as follows:

Year Ended December 31,	2019		2018		2017
Balance, beginning of period	$	—	$	—	$	—
Increases related to prior year tax positions	—		—		—
Decreases related to prior year tax positions	—		—		—
Balance, end of period	$	—	$	—	$	—

Schedule of Net Operating Loss And Tax Credit Carryovers

Pursuant to the intercompany tax sharing agreement, to the extent Ambac Assurance generates taxable income after September 30, 2011, which is offset with "Allocated NOLs" of $3,650, it is obligated to make payments (“Tolling Payments”), subject to certain credits, to AFG in accordance with the following NOL usage table, where the “Applicable Percentage” is applied to the aggregate amount of federal income tax liability that would have been paid if the Allocated NOLs were not available. Pursuant to the Closing Agreement between Ambac and the Internal Revenue Service ("IRS"), the IRS will receive 12.5% of Tier C and 17.5% of Tier D payments, if made.

NOL Usage Table

NOL Usage Tier	Allocated NOLs			Applicable Percentage
A	The first	$479		15%
B	The next	$1,057	after Tier A	40%
C	The next	$1,057	after Tier B	10%
D	The next	$1,057	after Tier C	15%