Bank of America 2001 Annual Report Download - page 114

BANK OF AMERICA 2001 ANNUAL REPORT
112
Note 17 Income Taxes
The components of income tax expense for the years ended December 31, 2001, 2000 and 1999 were as follows:
(Dollars in millions) 2001 2000 1999
Current expense:
Federal $3,183 $ 3,109 $ 1,470
State 364 161 63
Foreign 341 354 341
Total current expense 3,888 3,624 1,874
Deferred (benefit) expense:
Federal (554) 526 2,207
State (10) 120 254
Foreign 11(2)
Total deferred (benefit) expense (563) 647 2,459
Total income tax expense $3,325 $4,271 $4,333
The preceding table does not reflect the tax effects of unrealized gains and losses on available-for-sale and marketable equity securities, foreign
currency translation adjustments and derivatives that are included in shareholders’ equity and certain tax benefits associated with the Corporation’s
employee stock plans. As a result of these tax effects, shareholders’ equity increased by $21 million in 2001, decreased by $684 million in 2000 and
increased by $1.6 billion in 1999. The Corporation’s current income tax expense approximates the amounts payable for those years. Deferred income
tax expense represents the change in the deferred tax asset or liability and is discussed further below.
A reconciliation of the expected federal income tax expense using the federal statutory tax rate of 35 percent to the actual income tax expense
for the years ended December 31, 2001, 2000 and 1999 follows:
(Dollars in millions) 2001 2000 1999
Expected federal income tax expense $ 3,541 $4,126 $4,275
Increase (decrease) in taxes resulting from:
Tax-exempt income (105) (116) (103)
State tax expense, net of federal benefit 230 183 206
Goodwill amortization(1) 366 202 207
Basis difference in subsidiary stock (418) ––
Low income housing credits (129) (108) (79)
Foreign tax differential (83) (72) (58)
Other (77) 56 (115)
Total income tax expense $3,325 $ 4,271 $4,333
(1) Goodwill amortization included in business exit costs was $164 million in 2001.