Income Tax (Provision) Benefit

6 Months Ended

Sep. 30, 2012

Income Tax (Provision) Benefit [Abstract]

Income Tax (Provision) Benefit

8. Income Tax (Provision) Benefit

The income tax (provision) benefit for the three and six months ended September 30, 2012 and 2011 was determined by computing the current and deferred tax provisions for the interim periods using the GUC Trust’s statutory tax rate of 35%. An annual effective tax rate is not determinable because the GUC Trust’s only significant source of income is gains on distributions or sales of New GM Securities, which are not determinable until realized. The components of the income tax (provision) benefit in the statements of changes in net assets in liquidation for the three and six months ended September 30, 2012 and 2011 are as follows:

	Three Months Ended September 30,					Six Months Ended September 30,
(in thousands)	2012			2011		2012		2011
Current	$	—		$	—	$	—	$	—
Deferred		(20,318	)		—		88,265		—
Total	$	(20,318	)	$	—	$	88,265	$	—

Deferred taxes in the accompanying condensed statement of net assets in liquidation at September 30, 2012 are comprised of the following components:

(in thousands)
Deferred tax assets:
Reserves for expected costs of liquidation	$	19,482
Net operating losses		15,571
Gross deferred tax assets		35,053
Deferred tax liabilities:
Fair value in excess of tax basis of holdings of New GM Securities		(55,371	)
Gross deferred tax liabilities		(55,371	)
Net deferred tax liability	$	(20,318	)

Valuation allowances against deferred tax assets aggregating $18.3 million were provided during the quarter and six months ended September 30, 2011 due to uncertainty as to whether the deferred tax assets are realizable. Realization of the deferred tax assets is solely dependent upon the generation of taxable gains upon the distribution or sale of New GM Securities in the future, which is not determinable prior to occurrence. During the quarter ended September 30, 2012, the valuation allowance of $49.2 million established in the previous quarter was reversed due to anticipated taxable gains exceeding deductible items as a result of the increase in the fair value of New GM Securities during the quarter ended September 30, 2012.